Using http://highered.mheducation.com/sites/dl/free/0078025834/1061245/Spiceland
ID: 2475322 • Letter: U
Question
Using http://highered.mheducation.com/sites/dl/free/0078025834/1061245/Spiceland8e_AirFrance2013AnnualReport.PDF
A1. What amounts did AF report for the following items for the fiscal year ended December 31, 2013? Total revenues Income from current operations Net income or net loss (AF equity holders) Total assets Total equity A2. What was AF's basic earnings or loss per share for the 2013 fiscal year? A3. Examine Note 4.1.1 of AF's annual report. What accounting principles were used to prepare AF's financial statements? Under those accounting principles, could AF's financial information differ from that of a company that exactly followed IFRS as published by the IASB? Explain. A4. Describe the apparent differences in the order of presentation of the components of the balance sheet between IFRS as applied by Air France–KLM (AF) and a typical balance sheet prepared in accordance with U.S. GAAP.
Explanation / Answer
1.
The amount of total revenues, net income/(loss), total assets and total equity reported under 31st Dec., 2013 are as under:
Total revenues at the year ended 31st Dec. 2013=$25,530
Income from current operations for the year ended 31st Dec. 2013=$130
Net loss reported at the year ended 31st Dec. 2103 = ($528)
Total assets for the year ended 31st Dec. 2013 = $25,423
Total equity for the year ended 31st Dec. 2013=$2,290
2.
The basic earnings per share for the year 2013=$6.17
3.
The AF has followed IFRS as adopted by the European commission. IFRS as adopted by the EU differs with the IFRS published by the International Accounting Standard Board.
4.
As per US GAAP current and non-current assets and liabilities are classified based on nature of the asset or liability where as under IFRS all amounts are classified under non-current in the balance sheet.
Layout of balance sheet and income statement is specified under US GAAP that is as per regulation of S-X, whereas there is no such specified format under IFRS therefore AF financial statement differs from the prescribed format under US GAAP.
Under US GAAP there is no requirement of specifying the performance measures except for certain key measures and require the presentation of certain headings and subtotals. Under IFRS the presentation of additional line items headings and subtotals in the statement of comprehensive income is required for understanding the entity’s financial performance. Like in AF company financial statement, sales of aircraft equipment and disposals of other assets, income from the disposal of subsidiaries and affiliates, restructuring cost when they are significant etc. have been stated separately to show the performance of the company.
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