IAS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Component approach
Professional file: construction and commissioning of a production site
Section 1 of 8
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 / 4 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
'Component approach' workpaper: structure, roof, kiln body and refractory lining.
Purpose of the workpaper
Allocate the cost of the asset between land and the significant components, with the useful life and residual value of each; the table must add up to the total cost. When a component is replaced or a major inspection is performed, complete the dedicated section: the new cost is capitalised and the carrying amount of the replaced part is derecognised.
Questions of the file covered by this workpaper
- Break the site down into components and check that the breakdown agrees with the cost of the site.
Documents in the file
Open the documents to pick out the relevant information.