Below-market or forgivable government loan file

• Government loan: terms, rate, repayment plan and forgiveness conditions

  Text

  PRET_A_SANS_INTERET_FINANCANT_UNE_CENTRALE

• Proceeds received from the loan

  Number

  1,000,000

• Single contractual flow repayable at maturity

  Number

  1,000,000

• Market rate adopted (case assumption, justified)

  Number

  6 %

• Number of periods to maturity

  Number

  3 years

• Loan liability at the start of the tracking period

  Number

  839,619.28

• Interest at the effective rate for the period (loan schedule)

  Number

  50,377.16

• Repayments of the period

  Number

• Loan liability reported at the closing date

  Number

  889,996.44

• Part of the interest included in the asset (case data, IAS 23)

  Number

  25,188.58

• Part of the interest recognised as an expense

  Number

  25,188.58

• Expenditure incurred on the qualifying asset

  Number

  1,400,000

• Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

  Number

  0

• Amount of the loan whose forgiveness is assured

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Points reviewed: rate, benefit, IFRS 9 boundary, forgiveness, IAS 23 link

  ChecklistRequired

  • Market rate supported (documented assumption)
  • Benefit of the loan treated as a grant
  • Boundary with the measurement of the loan under IFRS 9 identified
  • Forgiveness conditions assessed (reasonable assurance)
  • Eligible expenditure computed net of grants received in cash

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Initial value of the loan = present value of the flow at the market rate

  Calculation

  839,619.28

  Single contractual flow repayable at maturity ; Market rate adopted (case assumption, justified) ; Number of periods to maturity

• Benefit of the loan = proceeds − initial value

  Calculation

  160,380.72

  Proceeds received from the loan ; − Initial value of the loan = present value of the flow at the market rate

• Closing loan liability rebuilt

  Calculation

  889,996.44

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Loan liability reconciliation difference

  Calculation

  0

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Expenditure eligible for capitalisation, net of grants received in cash

  Calculation

  1,400,000

  Expenditure incurred on the qualifying asset ; − Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

• Below-market government loan: liability at its initial value and benefit as deferred income

  Entry

  Account	Debit	Credit
  Cash	1,000,000
  Financial liability		839,619.28
  Deferred income (benefit of the loan)		160,380.72

• Interest expense at the effective rate

  Entry

  Account	Debit	Credit
  Interest expense	25,188.58
  Financial liability		25,188.58

• Interest included in the cost of the qualifying asset

  Entry

  Account	Debit	Credit
  Property, plant and equipment	25,188.58
  Financial liability		25,188.58

• Loan whose forgiveness is assured, now a grant

  Entry

  Debit Financial liability ← Amount of the loan whose forgiveness is assured ; Credit Grant income ← Amount of the loan whose forgiveness is assured

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Market rate and initial measurement of the loan

  JudgmentRequired

  Market rate supported

  Market rate supported / Market rate not supported (information to obtain)

  Rule and cross-reference: the benefit of a below-market government loan is the difference between the initial carrying amount of the loan (under IFRS 9) and the proceeds received; it is treated as a grant (IAS 20, para. 10A). The market rate is an assumption of the file, not a rule of IAS 20.

• Rationale: source of the market rate (case assumption), measurement under IFRS 9

  TextRequired

• Forgiveness conditions of the loan

  JudgmentRequired

  Reasonable assurance of forgiveness / No reasonable assurance

  Rule and cross-reference: a forgivable government loan is treated as a grant when there is reasonable assurance that the entity will meet the conditions for forgiveness (IAS 20).

• Rationale: forgiveness conditions and elements supporting the assurance

  TextRequired

• Effect of the entries, line by line (derived from the entries)

  Table

IAS 20 §10A

• Disclosures: government loan and benefit

  ChecklistRequired

  • Terms of the loan and benefit recognised stated
  • Market rate assumptions stated

• Paragraphs cited in this workpaper and their verification status

  References

• Market rate documentedPass
• Loan entry balancedPass
• Interest entry balancedPass

Assets

1,025,188.58

Liabilities

1,050,377.16

Profit or loss

-25,188.58

OCI

0

Equity

-25,188.58

• Government loan: terms, rate, repayment plan and forgiveness conditions

  Text

  PRET_B_REMBOURSABLE_DONT_LA_REMISE_EST_ASSUREE

• Proceeds received from the loan

  Number

• Single contractual flow repayable at maturity

  Number

• Market rate adopted (case assumption, justified)

  Number

• Number of periods to maturity

  Number

• Loan liability at the start of the tracking period

  Number

• Interest at the effective rate for the period (loan schedule)

  Number

• Repayments of the period

  Number

• Loan liability reported at the closing date

  Number

• Part of the interest included in the asset (case data, IAS 23)

  Number

• Part of the interest recognised as an expense

  Number

• Expenditure incurred on the qualifying asset

  Number

• Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

  Number

• Amount of the loan whose forgiveness is assured

  Number

  200,000

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Points reviewed: rate, benefit, IFRS 9 boundary, forgiveness, IAS 23 link

  ChecklistRequired

  • Market rate supported (documented assumption)
  • Benefit of the loan treated as a grant
  • Boundary with the measurement of the loan under IFRS 9 identified
  • Forgiveness conditions assessed (reasonable assurance)
  • Eligible expenditure computed net of grants received in cash

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Initial value of the loan = present value of the flow at the market rate

  Calculation

  Single contractual flow repayable at maturity ; Market rate adopted (case assumption, justified) ; Number of periods to maturity

• Benefit of the loan = proceeds − initial value

  Calculation

  0

  Proceeds received from the loan ; − Initial value of the loan = present value of the flow at the market rate

• Closing loan liability rebuilt

  Calculation

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Loan liability reconciliation difference

  Calculation

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Expenditure eligible for capitalisation, net of grants received in cash

  Calculation

  0

  Expenditure incurred on the qualifying asset ; − Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

• Below-market government loan: liability at its initial value and benefit as deferred income

  Entry

  Debit Cash ← Proceeds received from the loan ; Credit Financial liability ← Initial value of the loan = present value of the flow at the market rate ; Credit Deferred income (benefit of the loan) ← Benefit of the loan = proceeds − initial value

• Interest expense at the effective rate

  Entry

  Debit Interest expense ← Part of the interest recognised as an expense ; Credit Financial liability ← Part of the interest recognised as an expense

• Interest included in the cost of the qualifying asset

  Entry

  Debit Property, plant and equipment ← Part of the interest included in the asset (case data, IAS 23) ; Credit Financial liability ← Part of the interest included in the asset (case data, IAS 23)

• Loan whose forgiveness is assured, now a grant

  Entry

  Account	Debit	Credit
  Financial liability	200,000
  Grant income		200,000

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Market rate and initial measurement of the loan

  JudgmentRequired

  Market rate supported / Market rate not supported (information to obtain)

  Rule and cross-reference: the benefit of a below-market government loan is the difference between the initial carrying amount of the loan (under IFRS 9) and the proceeds received; it is treated as a grant (IAS 20, para. 10A). The market rate is an assumption of the file, not a rule of IAS 20.

• Rationale: source of the market rate (case assumption), measurement under IFRS 9

  TextRequired

• Forgiveness conditions of the loan

  JudgmentRequired

  Reasonable assurance of forgiveness

  Reasonable assurance of forgiveness / No reasonable assurance

  Rule and cross-reference: a forgivable government loan is treated as a grant when there is reasonable assurance that the entity will meet the conditions for forgiveness (IAS 20).

• Rationale: forgiveness conditions and elements supporting the assurance

  TextRequired

• Effect of the entries, line by line (derived from the entries)

  Table

IAS 20 §10A

• Disclosures: government loan and benefit

  ChecklistRequired

  • Terms of the loan and benefit recognised stated
  • Market rate assumptions stated

• Paragraphs cited in this workpaper and their verification status

  References

• Market rate documentedNot filled in this instance
• Loan entry balancedNot evaluated
• Interest entry balancedNot evaluated

Assets

0

Liabilities

-200,000

Profit or loss

200,000

OCI

0

Equity

200,000

• Government loan: terms, rate, repayment plan and forgiveness conditions

  Text

  PRET_PUBLIC_SANS_INTERET_FINANCANT_UNE_EXTENSION

• Proceeds received from the loan

  Number

  500,000

• Single contractual flow repayable at maturity

  Number

  500,000

• Market rate adopted (case assumption, justified)

  Number

  5 %

• Number of periods to maturity

  Number

  2 years

• Loan liability at the start of the tracking period

  Number

  453,514.74

• Interest at the effective rate for the period (loan schedule)

  Number

  22,675.74

• Repayments of the period

  Number

• Loan liability reported at the closing date

  Number

  476,190.48

• Part of the interest included in the asset (case data, IAS 23)

  Number

  22,675.74

• Part of the interest recognised as an expense

  Number

• Expenditure incurred on the qualifying asset

  Number

  700,000

• Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

  Number

  0

• Amount of the loan whose forgiveness is assured

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Points reviewed: rate, benefit, IFRS 9 boundary, forgiveness, IAS 23 link

  ChecklistRequired

  • Market rate supported (documented assumption)
  • Benefit of the loan treated as a grant
  • Boundary with the measurement of the loan under IFRS 9 identified
  • Forgiveness conditions assessed (reasonable assurance)
  • Eligible expenditure computed net of grants received in cash

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Initial value of the loan = present value of the flow at the market rate

  Calculation

  453,514.74

  Single contractual flow repayable at maturity ; Market rate adopted (case assumption, justified) ; Number of periods to maturity

• Benefit of the loan = proceeds − initial value

  Calculation

  46,485.26

  Proceeds received from the loan ; − Initial value of the loan = present value of the flow at the market rate

• Closing loan liability rebuilt

  Calculation

  476,190.48

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Loan liability reconciliation difference

  Calculation

  0

  Loan liability at the start of the tracking period ; Loan liability reported at the closing date ; Interest at the effective rate for the period (loan schedule) ; − Repayments of the period

• Expenditure eligible for capitalisation, net of grants received in cash

  Calculation

  700,000

  Expenditure incurred on the qualifying asset ; − Grant received for the asset (0 if none; the benefit of the loan is not deducted, case convention)

• Below-market government loan: liability at its initial value and benefit as deferred income

  Entry

  Account	Debit	Credit
  Cash	500,000
  Financial liability		453,514.74
  Deferred income (benefit of the loan)		46,485.26

• Interest expense at the effective rate

  Entry

  Debit Interest expense ← Part of the interest recognised as an expense ; Credit Financial liability ← Part of the interest recognised as an expense

• Interest included in the cost of the qualifying asset

  Entry

  Account	Debit	Credit
  Property, plant and equipment	22,675.74
  Financial liability		22,675.74

• Loan whose forgiveness is assured, now a grant

  Entry

  Debit Financial liability ← Amount of the loan whose forgiveness is assured ; Credit Grant income ← Amount of the loan whose forgiveness is assured

IAS 20 §10IAS 20 §10AIAS 20 §24IAS 20 §26IAS 20 §27

• Market rate and initial measurement of the loan

  JudgmentRequired

  Market rate supported

  Market rate supported / Market rate not supported (information to obtain)

  Rule and cross-reference: the benefit of a below-market government loan is the difference between the initial carrying amount of the loan (under IFRS 9) and the proceeds received; it is treated as a grant (IAS 20, para. 10A). The market rate is an assumption of the file, not a rule of IAS 20.

• Rationale: source of the market rate (case assumption), measurement under IFRS 9

  TextRequired

• Forgiveness conditions of the loan

  JudgmentRequired

  Reasonable assurance of forgiveness / No reasonable assurance

  Rule and cross-reference: a forgivable government loan is treated as a grant when there is reasonable assurance that the entity will meet the conditions for forgiveness (IAS 20).

• Rationale: forgiveness conditions and elements supporting the assurance

  TextRequired

• Effect of the entries, line by line (derived from the entries)

  Table

IAS 20 §10A

• Disclosures: government loan and benefit

  ChecklistRequired

  • Terms of the loan and benefit recognised stated
  • Market rate assumptions stated

• Paragraphs cited in this workpaper and their verification status

  References

• Market rate documentedPass
• Loan entry balancedPass
• Interest entry balancedNot evaluated

Assets

522,675.74

Liabilities

522,675.74

Profit or loss

0

OCI

0

Equity

0