Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This material is also available under the Finance link at the company’s website (www.airfranceklm.com).

Required:
1. In Note 4.15: Lease contracts, AF states that “leases recorded in the balance sheet and lead to the recognition of:
– an asset representing a right of use of the asset leased during the lease term of the contract and
– a liability related to the payment obligation.” Is this policy generally consistent with U.S. GAAP?
2. From your reading of Note 4.15: Lease contracts, what would you say is the primary difference between IFRS 16 and U.S. GAAP in the way lessees account for leases?