Airbus, a global French aircraft manufacturer, prepares its financial statements in accordance with IFRS. On its 2019

Question:

Airbus, a global French aircraft manufacturer, prepares its financial statements in accordance with IFRS. On its 2019 income statement, it reported a net loss of approximately 1.3 billlion euros, driven primarily by a charge (expense) recorded during the year to recognize penalties asociated with a 3.6 billion euro settlement concerning foreign bribery and fraud charges brought against the company. That same year, on its statement of cash flows, it reported positive net cash from operating activities of 3.7 billion euros.


INSTRUCTIONS:
a. Explain in general how in the same year a company can report a large net loss on the income statement and a large positive net cash provided by operating activities on the statement of cash flows.
b. Comment specifically on why Airbus may have taken this charge in 2019.

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Financial Accounting

ISBN: 978-1119745327

11th Edition

Authors: Jamie Pratt, Michael F Peters

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