IAS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Capitalised or expensed expenditure
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
- ≈ 45 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
'Capitalised or expensed expenditure' workpaper: cost of the self-constructed building, exclusions, date capable of operating.
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 cost of the self-constructed building and the expenditure to recognise as an expense.
- Propose the entries for the construction, the expenses and the transfer to property, plant and equipment on commissioning.
- Decide the date capitalisation ceases and depreciation starts, and the treatment of the test sales, the parking income and the grant.
Documents in the file
Open the documents to pick out the relevant information.