British Airways, Plc. (BA), a U.K. company, prepares its financial statements according to International Financial Reporting Standards. BA's annual report for the year ended March 31, 2009, which includes financial statements and disclosure notes, is included with all new textbooks and can be found at www.britishairways.com. When answering questions, focus on BA's "Group" financial information (which is equivalent to "Consolidated" under U.S. GAAP).
Required:
1. Where in its March 31, 2009, balance sheet does BA report deferred taxes? How does this approach differ from the way deferred taxes are reported using U.S. GAAP? Using the Internet, determine how deferred taxes would be reported using IFRS at the time of your research. Explain why that approach might differ from the way BA reported deferred taxes at March 31, 2009.
2. Here's an excerpt from one of BA's notes to its financial statements:Taxation (in part)Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.
Is this policy consistent with U.S. GAAP? Explain.
3.Here's an excerpt from one BA's notes to its financial statements:Taxation (in part)Deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Is this policy consistent with U.S. GAAP? Explain.