Air France–KLM (AF) , a French company, prepares its financial statements according to International Financial Reporting Standards. AF’s annual report for the year ended March 31, 2011, which includes financial statements and disclosure notes, is provided with all new textbooks. This material also is included in AF’s “Registration Document 2010–11,” dated June 15, 2011 and is available at
1. Where in its March 31, 2011, balance sheet does AF report deferred taxes? How does this approach differ from the way deferred taxes are reported using U.S. GAAP? Using the Internet, determine how deferred taxes would be reported using IFRS at the time of your research. Explain why that approach might differ from the way AF reported deferred taxes at March 31, 2011.
2. Here’s an excerpt from one of AF’s notes to its financial statements:
Deferred taxes (in part)
The Group records deferred taxes using the balance sheet liability method, providing for any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes The tax rates used are those enacted or substantively enacted at the balance sheet date.

  • CreatedDecember 23, 2013
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