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IAS 19Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IAS 19L3 · Advanced

Documents

Company profile and case conventions

Memo

Company profile and case conventions

Quermont SA (fictitious entity) closes its accounts on 31 December; its functional currency is the euro. Case conventions (pedagogical assumptions): amounts in EUR; linear attribution of the benefit; the benefits paid by the fund and the employer contribution arise on 31 December, so that the net interest of the year is computed at the start-of-year rate on the opening net liability; no plan change in 20X6; the tax effect is ignored.

Cost of a defined benefit plan: reconciliation of the obligation and the assets, profit or loss, other comprehensive income and remeasurement as a balancing item

Defined benefit plan over a year: service cost, net interest, reconciliations of the obligation and the assets, remeasurement as a balancing item and entries

5 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

Objective

In progress
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 19 workpaper
Level
Advanced
Estimated time
≈ 120 min
Progress
0 / 5 steps done (review excluded)

Context

Quermont SA (fictitious entity) funds a defined benefit pension plan through a separate fund. At 31 December 20X6, you prepare the cost of the year and the closing net liability from the actuary report and the fund manager statement.

Assignment

Cost and reconciliation of the Quermont plan

Purpose of the workpaper

Reconcile the obligation and the plan assets from the opening to the closing balance. Net interest follows IAS 19 (start-of-year rate on the opening net liability, flows at year end by case convention); the remeasurements are the differences between the closing balances supplied and the balances computed. Actuarial assumptions, rate and attribution are case data; their choice remains a supported judgment.

Questions of the file covered by this workpaper

  • Compute the benefit attributed to the year.
  • Compute the service cost of the year.
  • Compute the opening net liability.
  • Compute the interest on the opening obligation.
  • Compute the interest income on the plan assets.
  • Compute the net interest of the year.
  • Reconcile the obligation and determine the actuarial loss as a balancing item.
  • Compute the return on the assets excluding interest from the actual return.
  • Reconcile the assets and determine, as a balancing item, the gain excluding interest.
  • Compute the cost of the year in profit or loss.
  • Compute the net remeasurement in other comprehensive income.
  • Compute the closing net liability.
  • Record the service cost.
  • Record the net interest.
  • Record the net remeasurement in other comprehensive income.
  • Record the employer contribution to the fund.

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