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IAS 19Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IAS 19L4 · Expert

Documents

Company profile and case conventions

Memo

Company profile and case conventions

Sorbane SA (fictitious entity) makes furniture; it closes its accounts on 31 December and its functional currency is the euro. Case conventions (pedagogical assumptions): amounts in EUR; all short-term benefits are settled within twelve months; for the managers plan, the benefits paid and the employer contribution occur on 31 December and net interest is computed at the start-of-year rate on the opening net liability; linear attribution of the benefit; the events of the workshop plan take effect on 1 July 20X6, the loss on the prior remeasurement and the net interest of the first half-year being already recognised in it; the rates, the flows and the horizon of the ceiling are data from the actuary; the tax effect is ignored.

Asset ceiling of a plan in surplus: availability of the benefits, minimum funding and effect in other comprehensive income

Year-end employee benefits file: plan classification, short-term benefits, cost of a defined benefit plan, plan event and asset ceiling

9 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
Expert
Estimated time
≈ 90 min
Progress
0 / 5 steps done (review excluded)

Context

Sorbane SA (fictitious entity), a furniture manufacturer, closes its accounts on 31 December 20X6. You prepare the year-end employee benefits file: one defined contribution plan and three defined benefit pension plans, the short-term benefits, and the entries of the year. The file will be reviewed by the responsible partner. Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.

Assignment

Asset ceiling of the executives plan

Purpose of the workpaper

Establish the surplus of the plan, determine whether the entity has an unconditional right to a refund or to a reduction in contributions, take the minimum funding requirements into account year by year and then in present value, and retain the lower of the surplus and the ceiling. An excess of the contributions required over the service cost reduces the benefit, which can never be negative. Amounts and schedules are case data; the intention of the entity creates no available benefit.

Questions of the file covered by this workpaper

  • Does the entity have an unconditional right to reduce its future contributions or to obtain a refund of the surplus of the executives plan?
  • Compute, in present value, the difference between the minimum contributions for future service and the future service cost.
  • Determine the benefit available as a reduction in contributions, without it being below zero.
  • Determine the net asset to recognise for the executives plan.
  • Compute the effect of the ceiling.
  • Record the effect of the ceiling.

Documents in the file

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