Cases
Practical case
Calder SA (fictitious entity) holds shares in two companies it did not create alone: Hanvir SA, which runs a processing plant, and Kelmar SAS, a logistics platform in which it subscribes capital in 20X6. You prepare the classification note for the two arrangements.
Your assignment
For Hanvir, determine which parties have joint control from the decision rule, then examine the legal form, the contractual terms and the other facts and circumstances to classify the arrangement; do the same for Kelmar; say whether the intention of the parties or the purpose of the vehicle changes the classification; record the subscription of Calder in Kelmar, 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
4 documents: open each one to read it.
Document 1Memo
Calder SA (fictitious entity) closes its accounts on 31 December 20X6. Case conventions: amounts in EUR; the decision rule, the shares and the purchase commitments are those of the agreements; case convention (pedagogical assumption, not attributed to IFRS 11): the purchase commitments of Hanvir are enforceable at law; the subscription in Kelmar is paid in cash; the entry is illustrative.
The figures of the documents, gathered for your work.
| Item | Value | Found in |
|---|---|---|
| Decision threshold of Hanvir | 75% | |
| Votes of Calder in Hanvir | 50% | |
| Votes of Ruvane in Hanvir | 30% | |
| Votes of Mistel in Hanvir | 20% | |
| Capital of Kelmar | €5,000,000.00 | |
| Share of Calder in Kelmar | 40% | |
| Subscription of Calder in Kelmar | €2,000,000.00 | |
| Trademark filing costs | €15,000.00 |
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
Hanvir SA: shareholders' agreement and offtake contracts
Kelmar SAS: shareholders' agreement and subscription
Note on the trade name of the platform
9 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
Hanvir: which combination of parties reaches the decision threshold, and which parties have joint control?
Part 1 · Calculation
Hanvir: which combination of parties reaches the decision threshold, and which parties have joint control?
Task 2Professional judgement
Hanvir: does Mistel have joint control? Why is a single combination enough to conclude?
Task 3Analysis
Hanvir: what do the legal form and the terms of the agreement suggest about the rights of the parties?
Task 4Professional judgement
Hanvir: do the other facts and circumstances change the classification? Which type of arrangement results?
Task 5Analysis
Kelmar: joint control, legal form, terms and other facts and circumstances; which type of arrangement?
Task 6Professional judgement
Does the intention of Calder’s management or the purpose of Hanvir change the classification?
Task 7Journal entries
Record the subscription of Calder in Kelmar.
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 8Effects on the financial statements
What is the effect of the entry 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
Task 9Conclusion
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 / 11).
Document this file
These working papers use the data and results of this case.
Normative references