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Practical caseIAS 1L1 · Fundamental

Complete set of financial statements, compliance, going concern and accrual basis

6 documents7 tasks≈ 45 min
0 / 10 items completed
Standards
IAS 1 — Presentation of Financial Statements
Assistance levelFull guidance · strong assistance
  • Method: shown
  • Checklist: shown
  • Hints: shown
  • Step-by-step work: shown

Case brief

Situation

Orlane SA (fictitious entity), a furniture maker, closes its accounts on 31 December 20X6. You prepare the closing file: identification of the components of the set of financial statements, proposed note 1, assessment of going concern and allocation of an invoice to the right period. This standard applies until IFRS 18 applies (annual periods beginning on or after 1 January 2027); the IFRS 18 course presents what changes.

Your assignment

Identify the components of a complete set among the 7 documents of the file; say whether proposed note 1 can state without reservation compliance with IFRS; assess going concern; say to which period the electricity invoice belongs and record the corresponding entry; present its effect on the financial statements; conclude.

Work on this file as you would in practice: read the situation, open the documents, sort the useful information, then carry out the work requested. The solution is revealed once you submit.

Fundamental level: the method, help and references are shown.

Method

  1. Read the brief and the assignment.
  2. Open each document and spot the relevant data.
  3. Carry out the work in the suggested order.
  4. Submit, then read the conclusion and the model answer.

File checklist

  • Open each piece (0 / 6 consulted) · to do
  • Sort the information in the pieces · to do
  • Carry out the work (0 / 10) · to do
  • Submit the file, then assess yourself · to do

Documents

File documents

6 documents: open each one to read it.

Document 1Memo

Company profile and case conventions

Orlane SA (fictitious entity) makes furniture and closes its accounts on 31 December 20X6; its functional currency is the euro. Case conventions: amounts in EUR; the cash forecast and the minimum cash level are data of management; case convention (pedagogical assumption, not attributed to the standard): the entry is illustrative and uses a generic expense account and a generic payable account. This standard applies until IFRS 18 applies (annual periods beginning on or after 1 January 2027).

Data

Key data from the documents

The figures of the documents, gathered for your work.

ItemValueFound in
Documents in the file7 units
Components of a complete set5 units
Contracts following the local rule3 units
Horizon of the cash forecast15 months
Forecast minimum cash€640,000.00
Share of the customer in revenue35%
Electricity consumed in December 20X6€18,400.00

Sorting the information

Not every document matters: identify those that affect the accounting treatment.

Part 1 · Classification · Analysis

Sort each document: does it affect the accounting treatment?

Drag each item into its category, or tap the category under the item.

To sort6

  • Company profile and case conventions

  • Content of the 20X6 closing file

  • Proposed note 1: basis of preparation

  • Audit committee: going concern

  • Electricity invoice for December 20X6

  • Price list of an office chair supplier

Relevant to the treatment0

    No effect0

      Questions

      Work programme

      7 tasks in the order of the file. Calculations, entries and effects on the financial statements are marked; written answers are self-assessed against the solution.

      1. Task 1Analysis

        Which documents of the file are components of a complete set of financial statements?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      2. Task 2Professional judgement

        Can proposed note 1 state without reservation compliance with IFRS?

        Distinguish the case data, the assumption and your judgment.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      3. Task 3Professional judgement

        Can the financial statements be prepared on the going concern basis?

        Distinguish the case data, the assumption and your judgment.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Calculation

        Can the financial statements be prepared on the going concern basis?

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      4. Task 4Analysis

        To which period does the electricity invoice belong?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      5. Task 5Journal entries

        Record the electricity expense of December 20X6.

        Identify the accounts affected and the direction of each movement; check the balance.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Journal entry · Journal entries

        Entry 1 of 1

        One line = one account and one side. Add a line if the entry needs more; the balance check updates live.

        1. Line 1

        2. Line 2

        TotalsDebit0Credit0

      6. Task 6Effects on the financial statements

        What is the effect of the entry on the financial statements?

        For each financial statement, state the line affected, the direction and the amount.

        Part 1 · Classification · Analysis

        State the direction of the effect on each financial statement aggregate.

        1. Financial position (balance sheet)

        2. Profit or loss

        3. Other comprehensive income

        4. Equity

        Calculator

        Click in an answer field to be able to insert the result.

        Part 2 · Calculation · Analysis

        Quantify the effect on the aggregates concerned.

        1. €
        2. €

        Checks

        • 0 / 2 steps entered
        • Amounts readable

        Result: Amount of the effect — Equity

      7. Task 7Conclusion

        Write the conclusion.

        Write a conclusion that cites the facts and the treatment chosen.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      Workspace

      Your working draft for this file: points noted, leads, intermediate calculations.

      Saved on this device only; never graded.

      Conclusion

      Submission and solution

      Complete every item of the file to submit it (0 / 10).

      Document this file

      These working papers use the data and results of this case.

      Normative references

      • IAS 1 §25
      • IAS 1 §27