Air France KLM AF a French company prepares its financial statements
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 www.airfranceklm.com.

Required:
1. What method does Air France-KLM use to amortize the cost of computer software development costs? How does this approach differ from U.S. GAAP?
2. AF does not report any research and development expenditures. If it did, its approach to accounting for research and development would be significantly different from U.S. GAAP. Describe the differences between IFRS and U.S. GAAP in accounting for research and development expenditures.
3. AF does not report the receipt of any governments’ grants. If it did, its approach to accounting for government grants would be significantly different from U.S. GAAP. Describe the differences between IFRS and U.S. GAAP in accounting for government grants. If AF received a grant for the purchase of assets, what alternative accounting treatments are available under IFRS?

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