IAS 1 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Current or non-current classification of a borrowing, covenants, reclassification and total of current liabilities: Borrowing A
Current or non-current classification of borrowings with covenants, reclassification and disclosures
Section 1 of 8
Objective
Section brief
- What to document
- The engagement, its scope and the working mode chosen.
- Why
- A workpaper answers one precise question: framing it avoids off-topic work.
- How
- Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
- Expected result
- You know which question the workpaper must settle, and for which reporting date.
- Your role
- Preparer of the IAS 1 workpaper
- Level
- Advanced
- Estimated time
- ≈ 75 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Tavelle SA (fictitious entity), a logistics company, closes its accounts on 31 December 20X6; the financial statements are authorised for issue on 12 March 20X7. It has three bank borrowings, two of which carry covenants. You prepare the classification of each borrowing, the reclassification entry, the total of current liabilities and the disclosure. This standard applies until IFRS 18 applies (annual periods beginning on or after 1 January 2027); the IFRS 18 course presents what changes.
Assignment
Classification of borrowings A, B and C and total of current liabilities
Purpose of the workpaper
Record the amount of the borrowing, the 12-month repayment schedule, the covenants (test date, required level, position at the closing date) and the waiver agreements with their date. The classification depends on the rights that exist at the closing date and not on the intentions of management: compute the non-current portion, judge the right to defer, prepare the reclassification entry and the total of current liabilities. The amounts, the due dates and the covenant thresholds are case data.
Questions of the file covered by this workpaper
- Borrowing A: compute the non-current portion.
- Borrowing A: does the entity have the right to defer settlement at the closing date?
- Borrowing B: compute the non-current portion before the effect of the covenant.
- Borrowing B: does the entity have the right to defer at the closing date, in view of the February waiver?
- Record the reclassification of borrowing B to current.
- Borrowing C: does the intention to repay in September 20X7 change the classification?
- Compute the total of current liabilities.
Documents in the file
Open the documents to pick out the relevant information.