IAS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Depreciation calculation
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
'Depreciation calculation' workpaper: depreciation schedule and first-year time apportionment.
Purpose of the workpaper
Calculate the charge for the period under the method retained (straight-line with time apportionment, diminishing balance, units of production or by component) from the basis, the residual value and the remaining useful life, then the closing carrying amount. Only the method retained is filled in; the entry and the impact on the financial statements follow from it.
Questions of the file covered by this workpaper
- Calculate the depreciable amount and the annual depreciation charge.
- From what date does depreciation begin? Calculate the depreciation charge for 20X1.
- What journal entries do you record in 20X1?
- What is the impact of these entries on the financial statements at 31 December 20X1?
Documents in the file
Open the documents to pick out the relevant information.