IAS 20 · Case studies (Step 3 of 5)
Practical case
Corvane Industries SA, a fictitious engineering company, IFRS financial statements, year end 31 December, amounts in euros. It receives an equipment grant from the State, a training aid, an agency advance and a below-market government loan (case data).
L1 · Guided · Year N
Progressive case in four levels: (1) classify the help, (2) calculate and record, (3) deal with the repayment of a grant, (4) summary file with the government loan, capitalisation and disclosures. Amounts, periods and rates are case data or assumptions; conventions are flagged as such.
Corvane Industries SA receives several forms of government help during year N. Before any accounting, they must be classified. Applicable standard: IAS 20.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Corvane Industries SA, a fictitious engineering company, IFRS financial statements, year end 31 December, amounts in euros. It receives an equipment grant from the State, a training aid, an agency advance and a below-market government loan (case data).
Initial event · L1·Year N · Current stage
Corvane Industries SA receives several forms of government help during year N. Before any accounting, they must be classified. Applicable standard: IAS 20.
Pieces added
New period · L2·Years N and N+1 · Upcoming: unlocks after the current stage
New period · L3·End of year N+1 · Upcoming: unlocks after the current stage
New period · L4·Year N+2 · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
1 document to work from at this level.
Document 1Supporting document
Corvane Industries SA, a fictitious engineering company, IFRS financial statements, year end 31 December, amounts in euros.
| Help | Facts |
|---|---|
| A. State aid | €180,000 paid on 1 January N for the purchase of a press line (€900,000), on condition of maintaining production in the region for 6 years. The purchase is made, the production plan is signed and financed. |
| B. Regional aid | €90,000 paid for a 3-year training programme. |
| C. Agency advance | €150,000 paid, to be repaid unless an innovation programme is completed. |
| D. Agency advice | Free support, with no reasonably estimable value. |
| E. Tax credit | Reduction of income tax granted to the entity. |
First level: all the data is in the brief and the pieces of this level.
2 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each form of help.
A. State aid for the press line
B. Regional aid for training
C. Agency advance
D. Free agency advice
E. Tax credit
1 more question will appear once the current question is complete.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Answer every part to submit the level and see the conclusion.
Normative references