IAS 23 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
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Specific borrowing inclusion file
Specific borrowing: actual costs, investment income on temporary investment and eligible amount
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 23 workpaper
- Level
- Intermediate
- Estimated time
- ≈ 50 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Forges Ostrevent SA (fictitious entity) builds a metal-processing plant, a qualifying asset, financed by a specific loan of 2,000,000 EUR at 6% per year, drawn on 1 January 20X5. Works start on 1 March 20X5. Part of the funds, not yet spent, is invested temporarily. Year end 31 December 20X5.
Assignment
Specific borrowing file
Purpose of the workpaper
For each borrowing (one instance per borrowing), describe the loan and the asset, state whether a qualifying asset exists, enter the principal, the rate for the period (annual effective rate multiplied by the fraction of the period) and the unspent funds temporarily invested, then compute the actual costs, the investment income, the eligible costs and the costs to be expensed. The effective rate is a datum of the file (the effective interest method of IFRS 9 is not covered here).
Questions of the file covered by this workpaper
- Compute the actual borrowing costs of the inclusion period.
- Compute the investment income on the temporary investment.
- Compute the eligible costs.
- Record the inclusion, the investment income and the expense of January and February.
Documents in the file
Open the documents to pick out the relevant information.