IAS 24 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
State-related entity exemption check: scope, limits, disclosure kept and extent: Contract with Valdoria Rail SA
State-related entity: partial exemption, transaction with a State entity, loan to a manager and disclosure kept
Section 1 of 7
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
- ≈ 40 min
- Progress
- 0 / 3 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
State-related entity exemption check
Purpose of the workpaper
Identify the relationship of the State with the entity and the entities related through the same State, check the limits of the exemption (natural persons, ordinary dealings), compute the transactions of the State group from the proportion given by the case, assess the extent of the disclosure to keep (judgement, no threshold imposed), then prepare the note.
Questions of the file covered by this workpaper
- Does the exemption apply and to which entities?
- Which relationships are not covered by the exemption or are not related parties?
- Compute the sales made with the State and its entities from the proportion given.
- Which disclosure to keep: individual or collective? Justify.
Documents in the file
Open the documents to pick out the relevant information.