British Airways, Plc. (BA), a U.K. company, prepares its financial statements according to International Financial Reporting Standards.
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1. In Note 2: Summary of significant accounting policies, part d: Leased and hire purchase assets, BA states that “Where assets are financed through finance leases or hire purchase arrangements, under which substantially all the risks and rewards of ownership are transferred to the Group, the assets are treated as if they had been purchased outright.” Is this the policy companies using U.S. GAAP follow in accounting for capital leases? Explain.
2. Look at BA's Note 28: Long-term borrowings and Note 29: Operating lease commitments. Does BA obtain use of its aircraft more using operating leases or finance leases? Do lessees report operating and finance lease commitments the same way? Explain.
Financial Statements
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...
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Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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