Capitalisation timeline file: start, suspension and end

Context

Hélios Matériaux SA (fictitious entity) builds in 20X5 two qualifying assets: a kiln, financed by a specific loan of 1,500,000 EUR and by an equipment grant of 300,000 EUR, with an interruption of two months, and a warehouse, financed by the general borrowings. The file takes the two assets through to the financial statements of 20X5 and 20X6 (cumulative effects), with the documents, the judgements, the open points and the review. 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

Capitalisation timeline file

Purpose of the workpaper

For each asset under construction, describe the site, enter the expenditure, the progress payments and grants received, the duration between the start and the end of inclusion and the duration of extended suspensions, then compute the eligible expenditure and the inclusion period. Assess each interruption (extended suspension or temporary delay, substantial work) and the completion date. The borrowing costs of each phase come from the loan statement (a datum of the file).

Questions of the file covered by this workpaper

• What information is missing to settle the end date of inclusion for the kiln?
• Does the two-month interruption suspend inclusion for the kiln? Justify.
• Compute the eligible expenditure of the kiln, net of the grant.
• Compute the inclusion period of the kiln.
• On what date does inclusion end for the kiln? Justify.

• MemoEngagement letterOpen
• ContractSpecific loan of the kilnOpen
• MinutesSite log of the kilnOpen
• ScheduleExpenditure, grant and recoverable amount of the kilnOpen
• ScheduleGeneral borrowings and expenditure on the warehouseOpen
• ExtractReply from the technical departmentOpen
• MemoInsurance contract of the kilnOpen