Cases
Practical case
Orlane SA (fictitious entity) signed on 2 January 20X6, with Pevrin SA, Tarmel SA and Rivane SA, a contract to build and operate a storage depot, without creating a company. You prepare the note on the qualification and the accounting of Orlane's 20X6 financial year.
Your assignment
Determine whether the arrangement is a joint arrangement and which parties have joint control; compute the combined share of those parties; state the position of Rivane; classify the arrangement as a joint operation or a joint venture; record the share of Orlane in the depot; 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.
Fundamental level: the method, help and references are shown.
Method
File checklist
4 documents: open each one to read it.
Document 1Memo
Orlane SA (fictitious entity) closes its accounts on 31 December 20X6. Case conventions: amounts in EUR; the cost and capacity shares are those of the contract; case convention (pedagogical assumption, not attributed to IFRS 11): the construction is financed by a loan contracted jointly of which each party answers for its share; the entry is illustrative.
The figures of the documents, gathered for your work.
| Item | Value | Found in |
|---|---|---|
| Total cost of the depot | €4,000,000.00 | |
| Share of Orlane | 35% | |
| Share of Pevrin | 30% | |
| Share of Tarmel | 25% | |
| Share of Rivane (without a right of consent) | 10% | |
| Orlane's share of the cost | €1,400,000.00 | |
| Market study | €28,000.00 |
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.
Group profile and case conventions
Storage depot contract
Note on the structure of the project
Market study on storage tariffs
6 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
Do the decisions on the relevant activities require the unanimous consent of the parties sharing control, and what is the combined share of those parties?
Set out the facts, the question raised, then your analysis.
Part 1 · Calculation
Do the decisions on the relevant activities require the unanimous consent of the parties sharing control, and what is the combined share of those parties?
This answer is not marked automatically: after submitting, you will compare it with the solution.
Task 2Analysis
Does Rivane have joint control? How does it account for its interest?
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.
Task 3Analysis
Is the arrangement structured through a separate vehicle? What is its type?
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.
Task 4Journal entries
Record Orlane's share of the depot and of the joint loan.
Identify the accounts affected and the direction of each movement; check the balance.
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 5Effects 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.
Financial position (balance sheet)
Profit or loss
Other comprehensive income
Equity
Part 2 · Calculation · Analysis
Quantify the effect on the aggregates concerned.
Task 6Conclusion
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.
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 / 9).
Document this file
These working papers use the data and results of this case.
Normative references