IAS 12 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
IAS 12 Income Taxes — wording before IFRS 18Applicable today
Applies to annual periods beginning before January 1, 2027.
Group deferred tax: Investment in Valdrise Vescaria
Professional file: IFRS tax closing of an international industrial group
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 12 workpaper
- Level
- Expert
- Estimated time
- ≈ 55 min
- Progress
- 0 / 5 steps done (review excluded)
Context
The Valdrise group (fictitious entities) manufactures industrial valves and pumps. Valdrise SA, the parent, is based in Lustrania; its subsidiaries are Corvanne SA in Cadoria (loss-making), Arlesque SA in Merovia (acquired on 1 July 20X7) and Valdrise Vescaria in Vescaria (a low-tax country); the four countries are fictitious. You are the preparer of the consolidated tax closing file at 31 December 20X7; the head of consolidation is the reviewer. The financial statements will be authorised on 4 March 20X8. The current tax of Arlesque and Valdrise Vescaria and the deferred tax movements prior to the closing have been recorded; the closing adjustments remain to be made. The tax rules, rates and amounts calculated by the advisers are case data.
Assignment
Group deferred tax (Arlesque, Vescaria, share option plan, offsetting).
Purpose of the workpaper
At group level, compute the deferred tax on the fair value adjustments of a business combination and its effect on goodwill, deal with acquired tax benefits recognised after the acquisition, assess the deferred tax on investments (control of the timing of reversal, planned distributions) and on share-based payments (portion in profit or loss and in equity), then the offsetting of deferred tax assets and liabilities; post the entries and prepare the disclosures.
Questions of the file covered by this workpaper
- Calculate the deferred tax on the business combination and analyse the investments.
- Calculate the deferred tax asset of the share option plan and its allocation.
- Determine the offset presentation of deferred taxes.
- Record the closing entries.
Documents in the file
Open the documents to pick out the relevant information.