IAS 21 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
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- Case studies
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Foreign operation translation file: rates, translation reserve, goodwill, tax and intragroup balances: Translation of Qadira
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 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
- Expert
- Estimated time
- ≈ 75 min
- Progress
- 0 / 4 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 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
- Is the average rate acceptable for Norvik? Justify.
- Translate the assets, liabilities, revenue, expenses and equity of Norvik.
- Compute the translation difference as a balancing figure.
- Translate goodwill and the adjustment and compute the difference.
- Record the translation differences of Norvik.
- Check the roll-forward of the translation reserve of Norvik.
- Translate the restated net assets of Qadira.
Documents in the file
Open the documents to pick out the relevant information.