Grant repayment file

Context

Verdalis Textiles SA (fictitious entity, year end 31 December 20X5) has received or is asked to repay four forms of government support: a training programme grant (A), an equipment grant for a machine (B), the repayment of an old equipment grant (C) and an interest-free government loan that finances the extension of a plant (D). The file takes the four forms of support through to the financial statements, with the documents, the judgements, the open points and the review. 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

Repayment file

Purpose of the workpaper

For each grant that became repayable (one instance per original presentation method), describe the notification, enter the amount to be repaid and, depending on the method, the deferred income not yet released (deferred income method) or the recalculated depreciation and the depreciation already recognised (deduction method). Compute the surplus to be expensed or the catch-up depreciation, reconcile the deferred income, assess the impairment of the new carrying amount and prepare the entry.

Questions of the file covered by this workpaper

• Compute the cumulative releases of X to be expensed on repayment.
• Reconcile the deferred income of X.
• Record the four forms of support.

• MemoEngagement letterOpen
• ContractAgreement of support AOpen
• ContractSupport B: weaving machineOpen
• ScheduleSupport C: repayable grant XOpen
• ContractSupport D: government loanOpen
• ExtractReply from the regionOpen
• MemoInternal training planOpen