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: Altis borrowing
File on the presentation of financial statements under IAS 1: fair presentation, classification of liabilities, comprehensive income, notes and transition view to IFRS 18
Section 1 of 9
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
- Expert
- Estimated time
- ≈ 75 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Mervane SA (fictitious entity), an industrial company, closes its accounts on 31 December 20X6; the financial statements will be authorised for issue on 28 February 20X7. The preparer builds the presentation file submitted to a review check: classification of a borrowing whose covenant is not met at the closing date, going concern with a working capital deficit, compliance statement, comprehensive income and changes in equity, and a transition note to IFRS 18. IAS 1 remains applicable until IFRS 18 applies (annual periods beginning on or after 1 January 2027). 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.
Assignment
Classification of the Altis borrowing 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
- Altis borrowing: compute the non-current portion before the effect of the covenant.
- Does the entity have the right to defer settlement at the closing date, in view of the letter of 20 February 20X7?
- Record the reclassification of the borrowing to current.
- Compute the total of current liabilities.
Documents in the file
Open the documents to pick out the relevant information.