In the footnotes to its IFRS-based 2014 financial statements, European Aeronautical Defense and Space Company (EADS), parent
Question:
In the footnotes to its IFRS-based 2014 financial statements, European Aeronautical Defense and Space Company (EADS), parent company for Airbus, includes a description of a long-lived asset account called “investment property,” which is leased to a third party. The historical cost of the property is 211 million euros and accumulated depreciation is 142 million euros, leading to a balance sheet value of 69 million euros. The footnote also reports that an estimate of the fair market value of the property is 92 million euros.
a. Describe the differences between U.S. GAAP and IFRS regarding how this type of property is accounted for.
b. How has EADS chosen to account for the investment property?
c. What adjustment would EADS make to the 2014 financial statements if it chose to carry the investment roperty on its balance sheet at fair market value?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a Under US GAAP longlived assets must be carried at original cost less accumulated dep...View the full answer
