Context · Dated fact of the file
Nordane: from instruments issued to offsetting
Nordane SA
IAS 32 · Case studies (Step 3 of 5)
Practical case
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File · Progressive casePath L1 → L4L1 · Fundamental
Nordane: from instruments issued to offsetting
Nordane SA
1 document4 tasks
- Period
- 1 January N
- Standards
- IAS 32 — Financial Instruments: Presentation
- Levels
- 0 / 4 levels validated
- Current level
- L1 · Guided≈ 100 min
Assistance levelFull guidance · strong assistance
- Method: shown
- Checklist: shown
- Hints: shown
- Step-by-step work: shown
Case brief
L1 · Guided · 1 January N
Level 1: three instruments issued by Nordane
Nordane SA, a fictitious company, IFRS consolidated statements, year end 31 December, functional and presentation currency: the euro; Vexa SA and Ormel SA, fictitious counterparties. The facts and amounts are case data; conclusions come from the standard, from a practice reading or from a proposal and are flagged as such; amounts are whole numbers, except the 25% tax effect on the convertible bond's interest charge, rounded to the euro (case convention); the counterparts of the entries and the 25% tax rate are case conventions.
Nordane SA issues three instruments. For each, it must be said whether it creates an unavoidable contractual obligation to deliver cash, hence a financial liability, or whether it is an equity instrument (the standard is announced at this level).
Fundamental level: the method, help and references are shown.
Method
- 1Read the brief and the assignment.
- 2Open each document and spot the relevant data.
- 3Carry out the work in the suggested order.
- 4Submit, then read the conclusion and the model answer.
File checklist
- Open each piece (0 / 1 consulted) · to do
- Answer the questions of the level (0 / 4) · to do
- Validate the level, then read the conclusion · to do
Events
The file, period by period
2 / 6 stages reached
Initial event · L1·1 January N · Current stage
Level 1: three instruments issued by Nordane
Nordane SA issues three instruments. For each, it must be said whether it creates an unavoidable contractual obligation to deliver cash, hence a financial liability, or whether it is an equity instrument (the standard is announced at this level).
Pieces added
- Exhibit 1: the three instruments (case data)
New information · L2·1 January N · Upcoming: unlocks after the current stage
Upcoming stage
New period · L3·Year N · Upcoming: unlocks after the current stage
Upcoming stage
New period · L4·Year N+1 · Upcoming: unlocks after the current stage
Upcoming stage
Conclusion · Upcoming: unlocks after the current stage
Upcoming stage
Documents
Case documents
1 document to work from at this level.
Document 1Supporting document
Exhibit 1: the three instruments (case data)
| Instrument | Contract terms |
|---|---|
| Preference shares series P | 52,000 shares of €55, that is €2,860,000; mandatory redemption in cash at nominal on 31 December N+4; dividend decided each year by the meeting, with no guaranteed amount |
| Preference shares series Q | Total nominal of €1,300,000; no redemption date; mandatory fixed dividend of 6% every year |
| Ordinary shares | No redemption date; dividend decided freely by the meeting |
No special exception applies to these instruments (case convention).
Data
Facts of the file
- Entity
- Nordane SA
- Period
- 1 January N
- Current level
- L1 · Guided
- Standards
- IAS 32 — Financial Instruments: Presentation
Pieces carried over from earlier levels
First level: all the data is in the brief and the pieces of this level.
Questions
4 parts to answer, marked when you submit the level.
- Information to identify2
- Questions2
Information to identify
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each instrument issued by Nordane.
Drag each item into its category, or tap the category under the item.
To sort3
Preference shares series P
Preference shares series Q
Ordinary shares
Financial liability0
Equity instrument0
3 more questions will appear once the current question is complete.
Complete the question to continue.
Workspace
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Conclusion
Answer every part to submit the level and see the conclusion.
Normative references
- IAS 32 §16
- IAS 32 §22
- IAS 32 §25
- IAS 32 §26
- IAS 32 §28
- IAS 32 §31
- IAS 32 §32
- IAS 32 §AG32
- IAS 32 §33
- IAS 32 §35
- IAS 32 §37
- IAS 32 §42
- IAS 32 §AG38A
- IAS 32 §AG38B
- IAS 32 §AG38E
- IAS 32 §AG38F
- IAS 32