Cases
Practical case
Sauvanne SA (fictitious entity) is a joint venturer in Corvane SAS (40 %) and Delmas SA (50 %), two joint ventures whose classification is established. Tirel SA, another shareholder of Corvane, does not have joint control. You prepare the accounting for 20X6.
Your assignment
State how Sauvanne accounts for its interest in a joint venture; compute its share of the profit of Corvane and of the loss of Delmas, then the closing carrying amount of each investment; compute the share of Tirel and state the standard it applies; record the three entries, present their cumulative effect, state the disclosures required by IFRS 12 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.
Advanced level: no help, the work is grouped by kind.
5 documents: open each one to read it.
Document 1Memo
Sauvanne SA (fictitious entity) closes its accounts on 31 December 20X6. Case conventions: amounts in EUR; case convention (pedagogical assumption, not attributed to IFRS 11): the statements of the joint ventures follow the group’s policies and have the same closing date; no goodwill, fair value adjustment, intragroup profit or other comprehensive income; the loss of Delmas does not bring the investment below zero; the entries are illustrative.
The figures of the documents, gathered for your work.
| Item | Value | Found in |
|---|---|---|
| Profit of Corvane | €800,000.00 | |
| Share of Sauvanne in Corvane | 40% | |
| Opening carrying amount of the investment in Corvane | €1,500,000.00 | |
| Dividends received from Corvane | €120,000.00 | |
| Closing carrying amount reported | €1,700,000.00 | |
| Loss of Delmas | €300,000.00 | |
| Share of Sauvanne in Delmas | 50% | |
| Opening carrying amount of the investment in Delmas | €900,000.00 | |
| Closing carrying amount reported | €750,000.00 | |
| Share of Tirel in Corvane | 15% | |
| Insurance premium | €22,000.00 |
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
Corvane SAS: extract of the accounts and of equity
Delmas SA: extract of the accounts
Tirel SA: interest in Corvane
Head-office insurance premium
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
How does Sauvanne account for its interest in a joint venture?
Task 2Calculation
Corvane: compute the share of profit of Sauvanne.
Part 1 · Calculation
Corvane: compute the share of profit of Sauvanne.
Task 3Calculation
Delmas: compute the share of loss of Sauvanne.
Part 1 · Calculation
Delmas: compute the share of loss of Sauvanne.
Task 4Calculation
Corvane: compute the closing carrying amount of the investment.
Part 1 · Calculation
Corvane: compute the closing carrying amount of the investment.
Task 5Calculation
Delmas: compute the closing carrying amount of the investment.
Part 1 · Calculation
Delmas: compute the closing carrying amount of the investment.
Task 6Analysis
Tirel: what is its share of the profit of Corvane if it applies the equity method?
Part 1 · Calculation
Tirel: what is its share of the profit of Corvane if it applies the equity method?
Task 7Professional judgement
Does Tirel have significant influence, and which standard does it apply to its interest?
Task 8Journal entries
Corvane: record the share of profit.
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 9Journal entries
Delmas: record the share of loss.
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 10Journal entries
Corvane: record the dividend received.
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 11Effects on the financial statements
What is the cumulative effect of the three 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 12Analysis
Which IFRS 12 disclosures are to be prepared on these joint ventures?
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 / 16).
Document this file
These working papers use the data and results of this case.
Normative references