IAS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Capitalised or expensed expenditure
Acquisition of a machining centre
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 16 workpaper
- Level
- Foundation
- Estimated time
- ≈ 45 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Fonderie Valmont (a fictitious company) manufactures mechanical parts and its reporting date is 31 December. It applies the cost model to its property, plant and equipment. In 20X1 it acquires a computer-controlled machining centre to increase its production capacity. You are asked to account for the acquisition using the documents in the file below.
Assignment
'Capitalisable or expensed' workpaper: classification of each item of expenditure.
Purpose of the workpaper
Classify each item of expenditure of an asset project between the cost of the asset and the expenses of the period, supporting the classification by the nature of the expenditure and the date the asset is capable of operating. For a self-constructed asset, complete the dedicated section. Totals and entries are calculated from the tables.
Questions of the file covered by this workpaper
- Determine the initial cost of the machine and the total expenditure to be recognised as an expense.
Documents in the file
Open the documents to pick out the relevant information.