IAS 21 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Foreign currency items file: initial recognition, closing, exchange differences, advances and estimated rate: Land acquired in ZRD
File of a group with foreign operations: functional currency, loan and net investment, non-exchangeable currency, translation, hyperinflation and disposals (IAS 21)
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
- ≈ 60 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Groupe Solenne SA (fictitious entity), which presents consolidated financial statements in euros, is preparing the closing of 31 December 20X6. The file covers five situations: the functional currency of Norvik Distribution AS (fictitious entity, acquired on 1 January 20X6, Norway) and the loan the parent granted it, the purchase of a plot of land paid in a non-exchangeable currency, the translation of Norvik's statements with its goodwill, the translation of a subsidiary in a hyperinflationary economy (Qadira Retail SA, fictitious entity) and two disposals (Tamar Services Ltd and Hudson Pack Inc., fictitious entities). Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.
Assignment
Foreign currency items file
Purpose of the workpaper
For each item (one instance per item or situation), state its nature, the foreign currency amount and the rates given by the case, check the treatment according to whether the item is monetary or non-monetary, let the file compute the translated amounts and differences, document the judgements (average rate, exchangeability), prepare the entries and their effect on the financial statements.
Questions of the file covered by this workpaper
- Translate the loan at the initial rate then at the closing rate.
- Compute the exchange difference on the loan.
- Is the ZRD currency exchangeable at the measurement date? Justify.
- Translate the land at the estimated rate and measure the effect of the estimate.
- Record the acquisition of the land.
Documents in the file
Open the documents to pick out the relevant information.