IAS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Initial recognition and cost of acquisition
Professional file: construction and commissioning of a production site
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
- Expert
- Estimated time
- ≈ 60 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Céramiques de la Haute Vallée (a fictitious company) has a 31 December reporting date and measures its property, plant and equipment under the cost model; its policy deducts grants related to assets from their carrying amount. In 20X1, it built an industrial building with its own teams and bought a tunnel kiln from a foreign supplier; the site is commissioned during the year. You are in charge of the year-end file for 20X1 and 20X2: preparation of the workpapers, proposed entries, review of the notes, answers to the reviewer's notes and conclusion of the file.
Assignment
'Initial recognition and cost' workpaper: cost of the kiln, discounted dismantling, acquisition entry.
Purpose of the workpaper
Document the initial recognition of an item of property, plant and equipment: enter the invoice and contract data, qualify the item and its unit of account, determine the initial cost (net purchase price and directly attributable costs), complete the dismantling, deferred payment or exchange sections when they apply, then conclude and record the entries. Every amount is linked to supporting evidence.
Questions of the file covered by this workpaper
- Determine the initial cost of the kiln, including the discounted dismantling cost.
- Propose the entries for the kiln acquisition, the grant, the test sales and the parking income.
Documents in the file
Open the documents to pick out the relevant information.