IAS 21 · Case studies (Step 3 of 5)
Practical case
Calvera Group SA, a fictitious French company, IFRS financial statements, year end 31 December, amounts in euros. It enters into transactions in Australian dollars and Swiss francs, owns an Australian subsidiary and sells it in N+1 (case data).
L1 · Guided · Year N
Progressive case in four levels: (1) identify the situations and record the transactions, (2) reporting date and settlement, (3) translation of the subsidiary, goodwill and reserve, (4) net investment, tax, disposal and closing file. Rates, amounts and percentages are case data or assumptions; conventions are flagged as such.
Calvera Group SA closes its accounts at 31 December N. Before any calculation, we must identify, for each fact of the year, the IAS 21 situation it illustrates, determine the functional currency of the Australian subsidiary, then record two foreign currency transactions at the transaction date. Applicable standard: IAS 21.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Calvera Group SA, a fictitious French company, IFRS financial statements, year end 31 December, amounts in euros. It enters into transactions in Australian dollars and Swiss francs, owns an Australian subsidiary and sells it in N+1 (case data).
Initial event · L1·Year N · Current stage
Calvera Group SA closes its accounts at 31 December N. Before any calculation, we must identify, for each fact of the year, the IAS 21 situation it illustrates, determine the functional currency of the Australian subsidiary, then record two foreign currency transactions at the transaction date. Applicable standard: IAS 21.
Pieces added
New period · L2·Years N and N+1 · Upcoming: unlocks after the current stage
New period · L3·Year N · Upcoming: unlocks after the current stage
New period · L4·Years N and N+1 · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
1 document to work from at this level.
Document 1Supporting document
Calvera Group SA, a fictitious French company, functional and presentation currency: the euro; year end 31 December N.
| Fact | Description |
|---|---|
| A | On 10 February, purchase of machine parts invoiced at AUD 40,000; rate of the day: 0.60 euro per Australian dollar. |
| B | On 5 March, sale of goods to a Swiss customer, invoiced at CHF 30,000; rate of the day: 1.02 euro per Swiss franc. |
| C | The subsidiary Calvera Australia Pty carries out its activities in Australia: its selling prices are set by the local market, its wages and materials are paid in Australian dollars, and its borrowing and receipts are also in Australian dollars. |
| D | The group publishes its consolidated statements in euros. |
First level: all the data is in the brief and the pieces of this level.
4 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each fact in the IAS 21 situation it illustrates.
A. Purchase of parts invoiced in Australian dollars
B. Sale invoiced in Swiss francs
C. Subsidiary Calvera Australia Pty
D. Publication of the consolidated statements in euros
3 more questions 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