: 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 here. This material is also available under the Finance link at the company’s website (www.airfranceklm.com). Required: What amounts are shown in AF’s December 31, 2019, balance sheet for deferred taxes? Here’s an excerpt from AF’s notes to its financial statements: Deferred taxes (in part) The Group records deferred taxes using the balance sheet liability method, providing for any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for exceptions described in IAS 12 “Income taxes.” The tax rates used are those enacted or substantively enacted at the balance sheet date. a. Is this policy consistent with U.S. GAAP? Here’s an excerpt from one of AF’s notes to its financial statements: Deferred taxes (in part) Deferred tax assets related to temporary differences and tax losses carried forward are recognized only to the extent it is probable that a future taxable profit will be available against which the asset can be utilized at the tax entity level. a. Is this policy consistent with U.S. GAAP?
: 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 here. This material is also available under the Finance link at the company’s website (www.airfranceklm.com). Required: What amounts are shown in AF’s December 31, 2019, balance sheet for deferred taxes? Here’s an excerpt from AF’s notes to its financial statements: Deferred taxes (in part) The Group records deferred taxes using the balance sheet liability method, providing for any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for exceptions described in IAS 12 “Income taxes.” The tax rates used are those enacted or substantively enacted at the balance sheet date. a. Is this policy consistent with U.S. GAAP? Here’s an excerpt from one of AF’s notes to its financial statements: Deferred taxes (in part) Deferred tax assets related to temporary differences and tax losses carried forward are recognized only to the extent it is probable that a future taxable profit will be available against which the asset can be utilized at the tax entity level. a. Is this policy consistent with U.S. GAAP?
: 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 here. This material is also available under the Finance link at the company’s website (www.airfranceklm.com). Required: What amounts are shown in AF’s December 31, 2019, balance sheet for deferred taxes? Here’s an excerpt from AF’s notes to its financial statements: Deferred taxes (in part) The Group records deferred taxes using the balance sheet liability method, providing for any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for exceptions described in IAS 12 “Income taxes.” The tax rates used are those enacted or substantively enacted at the balance sheet date. a. Is this policy consistent with U.S. GAAP? Here’s an excerpt from one of AF’s notes to its financial statements: Deferred taxes (in part) Deferred tax assets related to temporary differences and tax losses carried forward are recognized only to the extent it is probable that a future taxable profit will be available against which the asset can be utilized at the tax entity level. a. Is this policy consistent with U.S. GAAP?
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 here. This material is also available under the Finance link at the company’s website (www.airfranceklm.com).
Required:
What amounts are shown in AF’s December 31, 2019, balance sheet for deferred taxes?
Here’s an excerpt from AF’s notes to its financial statements:
Deferred taxes (in part)
The Group records deferred taxes using the balance sheet liability method, providing for any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for exceptions described in IAS 12 “Income taxes.” The tax rates used are those enacted or substantively enacted at the balance sheet date.
a. Is this policy consistent with U.S. GAAP?
Here’s an excerpt from one of AF’s notes to its financial statements:
Deferred taxes (in part)
Deferred tax assets related to temporary differences and tax losses carried forward are recognized only to the extent it is probable that a future taxable profit will be available against which the asset can be utilized at the tax entity level.
a. Is this policy consistent with U.S. GAAP?
Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.
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