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: Annual office rent
Group file: close family, entities controlled by a manager, post-employment plan, management entity, arm's length, aggregation and public fund
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
- Expert
- Estimated time
- ≈ 60 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Valmora Matériaux SA (fictitious entity) closes its books on 31 December 20X6. Its chief executive, Mr Marc Bastide, controls two companies that work with the entity, Bastide Immobilier SARL (offices leased) and Bastide Transports SARL (transport). His father, Mr Lucien Bastide, is consulted by him on major decisions; the sister of the chief financial officer, Ms Hélène Roux, has no business or financial link with him. The chief financial officer is provided by Conseil Financier Altair SAS. The employees have a post-employment plan, Valmora Prévoyance, and the Regional Fund Valdor, a public fund, sits on the board and has significant influence over the entity. The person in charge of the file must settle several judgements before the note.
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
- Compute the total of the transport invoices of Bastide Transports SARL.
- Record the transport services received.
- Can it be stated that the rent is on arm's length terms, and may the transport invoices and the rent be aggregated?
Documents in the file
Open the documents to pick out the relevant information.