Air France KLM

Air France KLM ( AF), A franco-dutch company, prepares its financial statements according to International Financial reporting standards. AFs financial statements and disclosures notes for the year ended December 31, 2015, are available in connect. This material also available under the Finance link at the companys website.

Required:

AF provides share-based compensation in the form of PPSs, Phantom performance shares. Recipients receive compensation in what form? How are such plans reported in the balance sheet? [ Hint: See note 30: Share-based compensation.] Are AFs PPSs cliff vesting or graded vesting? How does accounting differ between U.S GAAP and IFRS for graded vesting-plans?

NOTE 30. SHARE-BASED COMPENSATION KLM PPSs plan During the periods ending December 31, 2015 and December 31, 2014, cash-settled share-based compensation plans index-linked to the change in the Air France-KLM share price were granted by KLM. They correspond to share-based plans with settlement in cash (PPS) Number of PPSs Start date for PPSs of PPSs Date exercised as of Grant date of expiry December 31, 2015 7/V2010 /V2011 45,450 A/2010 //2015 44,235 7/V2016 18,270 KLM 4/V2012 8,575 KLM 43,721 4/1/2014 /2015 The changes in PPSs were as follows Number of PPSs PPSs outstanding as of December 31, 2013 Of which: PPSs exercisable at December 31, 2013 PPSs granted during the period PPSs exercised during the period PPSs forfeited during the period PPSs outstanding as of December 31, 2014 Of which: PPSs exercisable at December 31, 2014 PPSs granted during the period PPSs exercised during the period PPSs forfeited during the period PPSs outstanding as of December 31, 2015 Of which: PPSs exercisable at December 31, 2015 520,358 330,807 CI07126) 525,703 133,018 (65,397) 523,372 355,416