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, 2015, are available in Connect This material is also available under the Finance li...

Air France-KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF's

Question:

Air France-KLM (AF), a Franco-Dutch company, prepares its according to International Financial Reporting Standards. AF's and disclosure notes for the year ended December 31, 2015, 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: Summary of accounting policies, part 4.14: Leases, AF states that "leases are classified as finance leases when the lease arrangement transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Is this the policy companies using U.S. follow?
2. Is this the policy AF will follow when it begins applying the new lease guidance in the 2015 update to IFRS 16? Explain.
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