IAS 21 · Workpapers (Step 4 of 5)
Workpaper assignment
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Net investment and disposal of a foreign operation file: differences, reclassification, partial disposal and non-controlling interests: Vistula — loss of control
Disposal of a foreign operation: loss of control, partial disposal, non-controlling interests and differences accumulated before hyperinflation
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
- Expert
- Estimated time
- ≈ 70 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Groupe Solenne SA (fictitious entity) presents consolidated financial statements in euros and accumulates the translation differences of its foreign subsidiaries in a translation reserve. In 20X6 it sells 60 % of the share capital of Vistula Systems Sp. z o.o. (fictitious entity), 80 % held, and loses control while retaining 20 %. It also sells 30 % of the share capital of Caledonia Packaging Ltd (fictitious entity), 100 % held, without losing control. Finally, the functional currency of Zandia Retail SA (fictitious entity) became that of a hyperinflationary economy during the year. The consolidation team must deal with the translation reserve of each subsidiary.
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
- Compute the share of the cumulative difference of Vistula belonging to non-controlling interests.
- Compute the amount reclassified to profit or loss on loss of control.
- Record the reclassification.
- Record the derecognition of the non-controlling interests share.
- Is the sale of 30 % of Caledonia a partial disposal? And what happens to the cumulative differences of Zandia? Justify.
- Compute the share of the cumulative difference of Caledonia to reattribute.
- Record the reattribution.
Documents in the file
Open the documents to pick out the relevant information.