Cases
Practical case
Fontaval SA (fictitious entity) closes its accounts on 31 December 20X6. It takes part in three pension arrangements, pays a long-service award and has made two voluntary departure offers. You prepare the classification note and the entries of the year.
Your assignment
Classify the two plans of the company and analyse the industry-wide plan; compute and record the contribution of the defined contribution plan; record the contribution of the industry-wide plan; say how to treat the long-service award and record its expense; determine, for each departure offer, whether a liability exists at the closing date, compute the present value of the payments and record them; present the effect on the financial statements and conclude. One document is not useful.
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.
Intermediate level: help remains available, on demand.
Method
File checklist
7 documents: open each one to read it.
Document 1Memo
Fontaval SA (fictitious entity) manufactures mechanical parts; it closes its accounts on 31 December and its functional currency is the euro. Case conventions (pedagogical assumptions): amounts in EUR; contributions are paid in cash on 31 December; the data of the actuary and the discount rate of management are case data; the tax effect is ignored.
The figures of the documents, gathered for your work.
| Item | Value | Found in |
|---|---|---|
| Pensionable salaries of 20X6 | €3,600,000.00 | |
| Contribution rate | 5% | |
| Contribution to the industry-wide plan | €45,000.00 | |
| Opening liability | €120,000.00 | |
| Service cost | €18,000.00 | |
| Interest | €7,200.00 | |
| Benefits paid | €9,000.00 | |
| Remeasurements | €5,300.00 | |
| Closing liability | €141,500.00 | |
| Expense of the year | €30,500.00 | |
| Total payment, logistics | €400,000.00 | |
| Years until settlement | 2 years | |
| Discount rate of management | 5% | |
| IT maintenance invoice | €12,800.00 |
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.
Company profile and case conventions
Rules of the "Épargne Horizon" plan
Rules of the managers' plan
Industry-wide mechanical plan
Actuary report: long-service award
Voluntary departure offers
IT maintenance invoice
13 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.
Task 1Analysis
Is the "Épargne Horizon" plan a defined contribution or a defined benefit plan, and why?
Task 2Calculation
Compute the contribution of the year for the defined contribution plan.
Part 1 · Calculation
Compute the contribution of the year for the defined contribution plan.
Task 3Journal entries
Record the contribution to the defined contribution plan.
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.
Line 1
Line 2
Task 4Analysis
Why is the managers' plan a defined benefit plan, and what does this classification change for the accounting?
Task 5Analysis
What can be said about the industry-wide plan, and how is its contribution accounted for?
Task 6Journal entries
Record the contribution to the industry-wide plan.
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.
Line 1
Line 2
Task 7Analysis
In which category does the long-service award fall, and what is the expense of the year?
Task 8Journal entries
Record the expense of the long-service award.
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.
Line 1
Line 2
Task 9Professional judgement
For each departure offer, is there a liability at 31 December 20X6, and at what date is it recognised?
Task 10Calculation
Compute the present value of the logistics payments.
Part 1 · Calculation
Compute the present value of the logistics payments.
Task 11Journal entries
Record the termination payments of logistics.
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.
Line 1
Line 2
Task 12Effects on the financial statements
What is the effect of the four entries on the financial statements?
Part 1 · Classification · Analysis
State the direction of the effect on each financial statement aggregate.
Financial position (balance sheet)
Profit or loss
Other comprehensive income
Equity
Part 2 · Calculation · Analysis
Quantify the effect on the aggregates concerned.
Result: Amount of the effect — Equity
Task 13Conclusion
Write the conclusion.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Complete every item of the file to submit it (0 / 15).
Normative references