Air France-KML Chapter 13.docx

Air France-KML Chapter 13.docx - Colleen Brown Intermediate...

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Colleen Brown Intermediate Accounting I Air France-KLM Case Chapter 13 1. Read Notes 4.6 and 35. What do you think gave rise to total deferred income of 249 Euros as of the end of fiscal 2015? Would transactions of this type be handled similarly under U.S. GAAP? – In Notes 4.6 and 35 from the annual report, it is reported that AF has received 249 Euros in advance for the flight services. AF would record a liability of deferred revenue when they receive the payment and later when the services are delivered. The liability would be decreased and corresponding revenue would be recorded. Transactions of this type would be handled similarly under U.S. GAAP. 2. Is the threshold for recognizing a provision under IFRS different than it is under U.S. GAAP? Explain. – For recognizing and recording liabilities associated with past events, both IFRS and U.S. GAAP require that the obligation must be probable and reasonably estimable. However, since IFRS defines probable as more likely than not, which is lower than the corresponding U.S. GAAP. It is more likely to recognize a liability under
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