IAS 24 · Case studies (Step 3 of 5)
Practical case
Cavendre Industries SA, a fictitious French company, IFRS financial statements, year end 31 December N, amounts in euros. It is a subsidiary of Cavendre Holding SA, itself controlled by the State of Arvenne (a fictitious entity). The facts and amounts are case data; conclusions come from the standard or from judgement and are flagged as such.
L1 · Guided · Year N
Progressive case in four levels: (1) map the group and related entities, (2) identify persons and transactions with related parties, (3) prepare the note (key management compensation, balances and allowances, arm's length statement), (4) apply the government-related entities exemption and reason the extent of disclosure.
Cavendre Industries SA is preparing the related party note of its financial statements. Before identifying transactions, one must establish which entities are related to it and what to disclose about its parent. The standard is announced at this level.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Cavendre Industries SA, a fictitious French company, IFRS financial statements, year end 31 December N, amounts in euros. It is a subsidiary of Cavendre Holding SA, itself controlled by the State of Arvenne (a fictitious entity). The facts and amounts are case data; conclusions come from the standard or from judgement and are flagged as such.
Initial event · L1·Year N · Current stage
Cavendre Industries SA is preparing the related party note of its financial statements. Before identifying transactions, one must establish which entities are related to it and what to disclose about its parent. The standard is announced at this level.
Pieces added
New information · L2·Year N · Upcoming: unlocks after the current stage
New information · L3·Year N · Upcoming: unlocks after the current stage
New information · L4·Year N · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
1 document to work from at this level.
Document 1Supporting document
| Entity | Link with Cavendre Industries SA |
|---|---|
| Cavendre Holding SA | Controls Cavendre Industries SA; publishes consolidated statements available to the public |
| State of Arvenne | Controls Cavendre Holding SA, hence the party exercising ultimate control |
| Cavendre Logistique SA | Another subsidiary of Cavendre Holding SA |
| Cavendre Services SA | Subsidiary of Cavendre Industries SA |
| Brandel SA | Cavendre Industries SA has significant influence over it |
| Tormen SAS | Joint venture: Cavendre Industries SA and Orlane SA share control by agreement |
| Orlane SA | Other venturer in Tormen SAS, with no other link with Cavendre Industries SA |
| Aubrac Conseil SARL | Controlled by Mr Aubrac, a director of Cavendre Industries SA |
| Banque Orfin | Finances Cavendre Industries SA on usual terms |
| Distrilux SA | Important customer of Cavendre Industries SA, with no control or significant influence |
First level: all the data is in the brief and the pieces of this level.
3 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each entity in exhibit 1 according to whether it is related to Cavendre Industries SA through a path in the definition.
Drag each item into its category, or tap the category under the item.
Cavendre Holding SA
Cavendre Logistique SA
Cavendre Services SA
Brandel SA
Tormen SAS
Aubrac Conseil SARL
Orlane SA
Banque Orfin
Distrilux SA
2 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