Prepare the journal entry to record the revaluation

Assignment Help Accounting Basics

Reference no: EM131922288

Question: 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, 2013, are provided with all new textbooks. This material also is available at www.airfranceklm-finance.com.

Required: 1. AF's property, plant, and equipment is reported at cost. The company has a policy of not revaluing property, plant, and equipment. Suppose AF decided to revalue its flight equipment on December 31, 2013, and that the fair value of the equipment on that date was €10,000 million. Prepare the journal entry to record the revaluation assuming that the journal entry to record annual depreciation had already been recorded. (Hint: you will need to locate the original cost and accumulated depreciation of the equipment at the end of the year in the appropriate disclosure note.)

2. Under U.S. GAAP, what alternatives do companies have to value their property, plant, and equipment?

3. AF calculates depreciation of plant and equipment on a straight-line basis, over the useful life of the asset. Describe any differences between IFRS and U.S. GAAP in the calculation of depreciation.

4. When does AF test for the possible impairment of fixed assets? How does this approach differ from U.S. GAAP?

5. Describe the approach AF uses to determine fixed asset impairment losses. (Hint: see Note 4.14) How does this approach differ from U.S. GAAP?

6. The following is included in AF's disclosure note 4.12: "Intangible assets are held at initial cost less accumulated amortization and any accumulated impairment losses." Assume that on December 31, 2013, AF decided to revalue its Other intangible assets (see Note 18) and that the fair value on that date was determined to be €580 million. Amortization expense for the year already has been recorded. Prepare the journal entry to record the revaluation.

Reference no: EM131922288

Questions Cloud

Complete the table by allocating the expenses : Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

Where would you begin to make sense of the mess : Where would you begin to make sense of this mess and what steps would you take to provide him a set of financial statements using accrual accounting?

Prepare flexible selling and administrative expenses budget : Prepare a flexible selling and administrative expenses budget for January 2016, for sales volumes of $90,000, $115,000, and $135,000.

Find the expected value of social security payments : You are advising a friend who has a decision to make regarding Social Security. He is about to turn 62 years old, and is eligible for early Social Security.

Prepare the journal entry to record the revaluation : The following is included in AF's disclosure note 4.12: "Intangible assets are held at initial cost less accumulated amortization and any accumulated.

What is the total cost assigned to job : An aircraft manufacturer produces custom built airplanes and uses job order costing. The company assigns overhead cost to completed jobs on the basis of 50%.

Why was the korean war a turning point in the cold war : Why was the Korean War a turning point in the Cold War? How was McCarthy able to build a national following and how was he brought down?

How has scholarship interpreted the myth : How has scholarship interpreted the myth? Do they think it is based on real events? If so, which ones? Be specific.

Develop a wbs in chart form by creating a new file : Use MindView Business software to develop a WBS in chart form by creating a new file or map in Top Down view.

User Account

All Pages