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IAS 21Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IAS 21L3 · Advanced

Documents

Subsidiary statements in pounds sterling

Schedule

Subsidiary statements in pounds sterling

Subsidiary statements in pounds sterling (GBP) at 31 December 20X5, subsidiary's own accounts without consolidation adjustments: total assets 1,000,000; total liabilities 300,000; revenue of the year 900,000; ordinary expenses 600,000; single restructuring expense of 100,000 incurred on 30 September 20X5; equity at the acquisition date (1 January 20X5) 500,000. No dividend was paid.

Foreign operation translation file: rates, translation reserve, goodwill, tax and intragroup balances

Translation of a UK subsidiary: closing rate, average rate, translation reserve and goodwill

4 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

Objective

In progress
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
Advanced
Estimated time
≈ 75 min
Progress
0 / 5 steps done (review excluded)

Context

Groupe Solenne SA (fictitious entity), which presents its consolidated financial statements in euros, acquired on 1 January 20X5 all of Britannia Components Ltd (fictitious entity), a UK company whose functional currency is the pound sterling (GBP). For the consolidated closing of 31 December 20X5, the consolidation team must translate the subsidiary's statements, compute the translation difference, deal with goodwill and fair value adjustments, and follow the translation reserve.

Assignment

Foreign operation translation file

Purpose of the workpaper

Enter the operation's statements in its functional currency and the rates given by the case (closing, average, transaction date, historical), let the file translate the items and compute the translation difference as a balancing figure, document the judgement on the average rate, follow the roll-forward of the translation reserve, then prepare the entries and their effect on the financial statements.

Questions of the file covered by this workpaper

  • Translate the assets.
  • Translate the liabilities.
  • Is the average rate acceptable for income and ordinary expenses? Justify.
  • Translate the revenue.
  • Translate the ordinary expenses.
  • Translate the single expense.
  • Translate the opening equity.
  • Compute the translation difference as a balancing figure.
  • Record the translation difference.
  • Translate goodwill and the fair value adjustment at the closing rate.
  • Compute the translation difference on goodwill and the adjustment.
  • Record that difference.
  • Check the roll-forward of the translation reserve.

Documents in the file

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