State-related entity exemption check: scope, limits, disclosure kept and extent: Sales with the Republic of Zorvane

Context

Telmar Industries SA (fictitious entity) is preparing its financial statements of 31 December 20X6. The file covers four parts: the map of related parties (the chief executive Mr Rémi Cassard, his mother Ms Odile Cassard, his brother Mr Hugo Cassard, Cassard Logistique SARL which he controls, the plan Telmar Retraite, Gestion Ardenne SAS which provides the chief financial officer, and the Republic of Zorvane); the compensation of the managers; the transactions and balances with Cassard Logistique SARL; the relationship with the State. As the preparer, you document each judgement; a reviewer then checks the file. 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

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

• Compute the sales made with the Republic of Zorvane and its entities.
• What disclosure to keep despite the exemption, and does it concern the loan to the chief executive?

• ScheduleLinks identifiedOpen
• MemoFacts about relativesOpen
• ScheduleCompensation of the employed managersOpen
• ContractContracts and planOpen
• InvoiceInvoices of Cassard Logistique SARLOpen
• ExtractStatement of the receivable from Cassard Logistique SARLOpen
• MemoManagement note on the termsOpen
• ContractRelationships with the StateOpen
• MemoMoving costsOpen