IAS 21 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Net investment and disposal of a foreign operation file: differences, reclassification, partial disposal and non-controlling interests
Loan to a US subsidiary: net investment, intragroup balance, separate or consolidated treatment and tax
Section 1 of 9
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
- Advanced
- Estimated time
- ≈ 70 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Groupe Solenne SA (fictitious entity), whose functional and presentation currency is the euro, holds all of Atlantic Gear Inc. (fictitious entity), a US company whose functional currency is the US dollar (USD). The parent granted it a loan in dollars and invoices it for services that feed a current account in dollars. For the closing of 31 December 20X5, the consolidation team must determine the treatment of the exchange differences on these two balances in the parent's separate statements and in the consolidated statements.
Assignment
Net investment and disposal file
Purpose of the workpaper
Document the facts on the planned or likely settlement of each balance, compute the net investment difference, then, for a disposal, the non-controlling interests share (derecognised, not reclassified), the amount reclassified to profit or loss and, for a partial disposal, the proportionate share reattributed; justify the judgements, prepare the entries and their effect on the financial statements.
Questions of the file covered by this workpaper
- Does the loan form part of the net investment? And the current account? Justify.
- Compute the exchange difference on the loan.
- Post the consolidation entry on the loan difference.
Documents in the file
Open the documents to pick out the relevant information.