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, 2017, are available in Connect. This material is also available under the Finance link at the company's website (www.airfranceklm.com). Required: AF's property, plant, and equipment is reported at cost. The company has a policy of not revaluing property, plant, and equipment. Suppose AF decided to revalue its flight equipment on December 31, 2017, and that the fair value of the equipment on that date was 12,000 million. Prepare the journal entry to record the revaluation assuming that the journal entry to record annual depreciation had already been recorded. (Hint: you will need to locate the original cost and accumulated depreciation of the equipment at the end of the year in the appropriate disclosure note.) 2. Under U.S. GAAP, what alternatives do companies have to value their property, plant, and equipment? 3. AF calculates depreciation of plant and equipment on a straight-line basis, over the useful life of the asset. Describe any differences between IFRS and U.S. GAAP in the calculation of depreciation. 4. When does AF test for the possible impairment of fixed assets? How does this approach differ from U.S. GAAP? 5. Describe the approach AF uses to determine fixed asset impairment losses. (Hint: see Note 4.14) How does this approach differ from U.S. GAAP? 6 The following is included in AF's disclosure note 4.13: "Intangible assets are recorded at initial cost less accumulated amortization and any accumulated impairment losses." Assume that on December 31, 2017, AF decided to revalue its Other intangible assets (see Note 18) and that the fair value on that date was determined to be 500 million. Amortization expense for the year already has been recorded. Prepare the journal entry to record the revaluation. 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, 2017, are available in Connect. This material is also available under the Finance link at the company's website (www.airfranceklm.com). Required: AF's property, plant, and equipment is reported at cost. The company has a policy of not revaluing property, plant, and equipment. Suppose AF decided to revalue its flight equipment on December 31, 2017, and that the fair value of the equipment on that date was 12,000 million. Prepare the journal entry to record the revaluation assuming that the journal entry to record annual depreciation had already been recorded. (Hint: you will need to locate the original cost and accumulated depreciation of the equipment at the end of the year in the appropriate disclosure note.) 2. Under U.S. GAAP, what alternatives do companies have to value their property, plant, and equipment? 3. AF calculates depreciation of plant and equipment on a straight-line basis, over the useful life of the asset. Describe any differences between IFRS and U.S. GAAP in the calculation of depreciation. 4. When does AF test for the possible impairment of fixed assets? How does this approach differ from U.S. GAAP? 5. Describe the approach AF uses to determine fixed asset impairment losses. (Hint: see Note 4.14) How does this approach differ from U.S. GAAP? 6 The following is included in AF's disclosure note 4.13: "Intangible assets are recorded at initial cost less accumulated amortization and any accumulated impairment losses." Assume that on December 31, 2017, AF decided to revalue its Other intangible assets (see Note 18) and that the fair value on that date was determined to be 500 million. Amortization expense for the year already has been recorded. Prepare the journal entry to record the revaluation