IAS 21 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Functional currency file: indicators, documented judgement, change and disclosures
Purchase in dollars: functional currency, recognition at the spot rate, remeasurement of the payable at closing and settlement
Section 1 of 8
Objective
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 21 workpaper
- Level
- Foundation
- Estimated time
- ≈ 45 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Vinoteca Ibérica SA (fictitious entity) sells wine to customers in the euro area and closes its books on 31 December 20X5. On 15 November 20X5 it buys from a US supplier a batch of barrels for resale, invoiced in US dollars (USD) and payable on credit. The payable is settled on 20 January 20X6. The accounting department must determine the functional currency, record the purchase, remeasure the payable at closing, then record the settlement.
Assignment
Functional currency file
Purpose of the workpaper
Describe the entity's facts (selling prices, costs, financing, receipts), enter the indicators observed in the grid, review them starting with the primary indicators, justify the conclusion (professional judgement, no threshold imposed), then prepare the disclosures. If the functional currency changes, translate the amounts at the rate of the date of the change.
Questions of the file covered by this workpaper
- What is the entity's functional currency, and is the dollar payable a monetary item?
- Translate the purchase at the spot rate of 15 November 20X5.
Documents in the file
Open the documents to pick out the relevant information.