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: Disposal of Tamar
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
- ≈ 70 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
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? Justify.
- Compute the exchange difference on the loan.
- Record the difference in the separate statements then post the consolidation entry.
- Compute the amount reclassified to profit or loss for the disposal of Tamar.
- Compute the share reattributed for the partial disposal of Hudson.
- Record the reclassification and the reattribution.
Documents in the file
Open the documents to pick out the relevant information.