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Professional fileIFRS 12L4 · Expert

Group file: disclosures on judgments, subsidiaries, joint arrangements and associates, and unconsolidated structured entities (IFRS 12)

7 documents17 tasks≈ 300 min
0 / 22 items completed
Standards
IFRS 12 — Disclosure of Interests in Other Entities
Assistance levelFree workspace · autonomous situation
  • Method: withdrawn
  • Checklist: withdrawn
  • Hints: withdrawn
  • Step-by-step work: withdrawn

Case brief

Situation

Norvane Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. The preparer builds the file of the disclosures on interests in other entities, submitted to a review check: Tolmer and Hanel (judgments), Belmont (non-controlling interests), Arvel and Nolet (associates) and unconsolidated structured entities. Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.

Your assignment

Build the plan of the file; document the judgments on Tolmer (weight of the votes cast) and Hanel; prepare the information on Belmont (profit allocated, accumulated balance, revenue before eliminations, restrictions); reconcile the summarised information of Arvel to its carrying amount and compute the unrecognised losses of Nolet; take an inventory of the unconsolidated structured entities and the support; record the dividend to the third parties of Belmont, present its effect, deal with the review points and conclude. One document is not useful.

You prepare a complete file: documents, work, entries and conclusion, then compare your work with the solution and the review points of the file.

Autonomous professional situation

As on a real engagement: no method, no checklist and no hints. You identify the issues yourself, organise the work and defend your conclusion.

  • Organise the work
  • Document each point
  • Argue the conclusion

Documents

File documents

7 documents: open each one to read it.

Document 1Memo

Group profile and file conventions

Norvane Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. The preparer builds the file, submitted to a review. File conventions: amounts in EUR; file convention (pedagogical assumption, not attributed to IFRS 12): the share of third parties follows the percentage held and no other comprehensive income is to be allocated; the goodwill of Arvel is provisional; the support to Pyrel is voluntary; the entry is illustrative.

Data

Key data from the documents

The figures of the documents, gathered for your work.

ItemValueFound in
Voting rights of Norvane in Tolmer38%
Voting rights of Norvane in Hanel16%
Profit of Belmont€600,000.00
Share of third parties in Belmont30%
Opening balance of the non-controlling interests€1,000,000.00
Dividends paid to third parties€90,000.00
Closing balance reported€1,090,000.00
Revenue with parties outside the group€2,500,000.00
Intragroup revenue€500,000.00
Summarised net assets of Arvel€4,000,000.00
Share of Norvane in Arvel25%
Provisional goodwill of Arvel€150,000.00
Adjustment decreasing the amount (Arvel)€50,000.00
Carrying amount reported for the interest in Arvel€1,100,000.00
Cumulative unrecognised share of the losses of Nolet at the opening€60,000.00
Unrecognised share of the losses of Nolet for the period€20,000.00
Units of the Orchis fund held€700,000.00
Subordinated notes of Pyrel held€300,000.00
Voluntary support to Pyrel€50,000.00
Sustainability report€24,000.00
Voting rights present at the meetings (average)50%

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 sort7

  • Group profile and file conventions

  • Tolmer SA and Hanel SA

  • Belmont SA: accounts, non-controlling interests and licence

  • Arvel SA and Nolet SA: summarised information

  • Structured entities Orchis and Pyrel

  • Sustainability report of the group

  • Attendance statement of the Tolmer meetings

Relevant to the treatment0

    No effect0

      Workspace

      Work programme

      Organise your work freely: deal with each point, then argue your conclusion.

      1. Task 1Analysis

        In which category of interests does each investee fall, and which disclosures does IFRS 12 aim at?

      2. Task 2Analysis

        Tolmer: what share of the votes cast does Norvane hold?

        Calculator

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

        Part 1 · Calculation

        Tolmer: what share of the votes cast does Norvane hold?

        1. %

        Checks

        • 0 / 1 step entered
        • Amounts readable

      3. Task 3Professional judgement

        Tolmer: which judgment on control must be explained?

      4. Task 4Professional judgement

        Hanel: which judgment on significant influence with less than 20 % of the voting rights must be explained?

      5. Task 5Calculation

        Belmont: compute the profit allocated to the non-controlling interests.

        Calculator

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

        Part 1 · Calculation

        Belmont: compute the profit allocated to the non-controlling interests.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      6. Task 6Calculation

        Belmont: compute the accumulated closing balance of the non-controlling interests.

        Calculator

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

        Part 1 · Calculation

        Belmont: compute the accumulated closing balance of the non-controlling interests.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      7. Task 7Analysis

        Belmont: which revenue should be presented in the summarised information, before or after intragroup eliminations?

        Calculator

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

        Part 1 · Calculation

        Belmont: which revenue should be presented in the summarised information, before or after intragroup eliminations?

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      8. Task 8Professional judgement

        Belmont: do the materiality and the distribution restriction call for a disclosure, and which one?

      9. Task 9Calculation

        Arvel: compute the share of the summarised net assets.

        Calculator

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

        Part 1 · Calculation

        Arvel: compute the share of the summarised net assets.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      10. Task 10Calculation

        Arvel: reconcile the summarised information to the carrying amount of the interest.

        Calculator

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

        Part 1 · Calculation

        Arvel: reconcile the summarised information to the carrying amount of the interest.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      11. Task 11Calculation

        Nolet: compute the cumulative unrecognised share of the losses at the closing date.

        Calculator

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

        Part 1 · Calculation

        Nolet: compute the cumulative unrecognised share of the losses at the closing date.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      12. Task 12Analysis

        Orchis and Pyrel: what is the total carrying amount of the interests in unconsolidated structured entities?

        Calculator

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

        Part 1 · Calculation

        Orchis and Pyrel: what is the total carrying amount of the interests in unconsolidated structured entities?

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      13. Task 13Professional judgement

        Are Orchis and Pyrel structured entities, and what should be said about the support to Pyrel?

      14. Task 14Journal entries

        Record the dividend paid to the non-controlling interests of Belmont.

        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

      15. Task 15Effects on the financial statements

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

        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

      16. Task 16Analysis

        Which points remain to be dealt with in the review, and how should they be settled?

      17. Task 17Conclusion

        Write the conclusion of the file.

      File review

      Points raised during the review of this file: read them as the preparer would.

      Review notes

      • BlockingResolvedReview point (blocking): support the weight of the votes of Tolmer with the attendance statement
      • Non-blockingOpenReview point: specify the effect of the final goodwill of Arvel on the reconciliation

      Information requests

      • ObtainedRequest to the Tolmer secretariat: average attendance at the meetings
      • Assumption documentedDocumented assumption: provisional goodwill of Arvel

      Completion checklist

      • Judgments on Tolmer and Hanel documentedDone
      • Information on Belmont reconciled to the dataDone
      • Summarised information of Arvel reconciled to the carrying amountDone
      • Structured entities inventoried and support describedDone
      • Entry balanced and effect on the financial statements establishedDone
      • Final goodwill of Arvel to be obtained from the valuerTo review

      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 / 22).

      Document this file

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

      Normative references

      • IFRS 12 §7
      • IFRS 12 §12
      • IFRS 12 §B12
      • IFRS 12
      • IFRS 12 §25A