IAS 23 · Case studies (Step 3 of 5)
Practical case
Solvane Industries SA, a fictitious packaging company, IFRS financial statements, year end 31 December, amounts in euros. It builds a packaging plant financed by a dedicated loan, then an automated warehouse financed by its general borrowings, and receives a grant linked to the plant.
L1 · Guided · Year N — January to March: classification and start
You progressively build Solvane's file: qualification and start of capitalisation (level 1, year N), specific borrowing and cap (level 2, year N), suspension, completion and general borrowings (level 3, year N+1), then grant, disclosure and review (level 4, years N+1 and N+2). The amounts, dates, effective rates, interruption durations and depreciation conventions are case data or assumptions; the rules come from IAS 23 and neighbouring standards.
Standard involved: IAS 23 Borrowing Costs. Solvane Industries starts a plant project. Say which assets are qualifying, date the start of capitalisation and calculate eligible expenditure. The questions are guided.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Solvane Industries SA, a fictitious packaging company, IFRS financial statements, year end 31 December, amounts in euros. It builds a packaging plant financed by a dedicated loan, then an automated warehouse financed by its general borrowings, and receives a grant linked to the plant.
Initial event · L1·Year N — January to March: classification and start · Current stage
Standard involved: IAS 23 Borrowing Costs. Solvane Industries starts a plant project. Say which assets are qualifying, date the start of capitalisation and calculate eligible expenditure. The questions are guided.
Pieces added
New period · L2·Year N — April to December: specific borrowing · Upcoming: unlocks after the current stage
New period · L3·Year N+1: suspension, end and general borrowings · Upcoming: unlocks after the current stage
New period · L4·Year N+1 to N+2: grant, notes and review · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
2 documents to work from at this level.
Document 1Supporting document
| Asset | Situation |
|---|---|
| A. Aubrac plant | Tailor-made packaging plant; the plan provides for 30 months of construction; financed by loan P |
| B. Securities portfolio | Investment securities bought on the stock market |
| C. Batch of cartons | Cartons produced in two days on an automated line |
| D. New truck | Truck bought new, delivered ready to run |
First level: all the data is in the brief and the pieces of this level.
4 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Sort each asset in exhibit 1: qualifying asset or not.
Drag each item into its category, or tap the category under the item.
A. Aubrac plant
B. Securities portfolio
C. Batch of cartons
D. New truck
3 more questions will appear once the current question is complete.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Answer every part to submit the level and see the conclusion.
Normative references