IAS 24 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Note on transactions and balances with related parties: content, allowances, categories, arm's length and aggregation
State-related entity: partial exemption, transaction with a State entity, loan to a manager and disclosure kept
Section 1 of 8
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 24 workpaper
- Level
- Advanced
- Estimated time
- ≈ 60 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Hydrozane Distribution SA (fictitious entity) distributes water and closes its books on 31 December 20X6. The Republic of Valdoria controls the entity, as it controls Valdoria Rail SA, one of its customers. The entity granted a loan to its chief executive, Mr Aldric Verne, and pays customs duties to the administration of a third country. Management must decide what to disclose about its relationships with the State.
Assignment
Note on transactions with related parties
Purpose of the workpaper
Identify the transactions and balances by category of related party, compute the totals by category, the closing allowance (opening, expense, write-offs) and the net balance of the receivable, assess whether an arm's length statement can be substantiated and whether items may be aggregated (judgements, no threshold imposed), then prepare the illustrative entries and the note. Amounts are case data.
Questions of the file covered by this workpaper
- Record the contract with Valdoria Rail SA (illustrative entry).
Documents in the file
Open the documents to pick out the relevant information.