In the footnotes to its IFRS-based 2012 financial statements, European Aeronautical Defense and Space Company (EADS), parent

Question:

In the footnotes to its IFRS-based 2012 European Aeronautical Defense and Space Company (EADS), parent company for Airbus, includes a description of a long-lived asset account called “investment property,” which is leased to a third party. The historical cost of the property is 211 and accumulated depreciation is 139, leading to a value of 72 (all in million euros). The footnote also reports that an estimate of the fair market value of the property is 79 million euros.
a. Describe the differences between U.S. and IFRS regarding how this type of property is accounted for.
b. How has EADS chosen to account for the investment property?
c. What adjustment would EADS make to the 2012 if it chose to carry the investment property on its at fair market value?

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