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IAS 33Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IAS 33L4 · Expert

Documents

Group profile and file conventions

Memo

Group profile and file conventions

Selvane Group SA (fictitious entity) is the listed parent of a group and closes its consolidated accounts on 31 December 20X6. A disposed line of business is classified as a discontinued operation. File conventions: weighting in whole months out of 12, earnings per share rounded to two decimals (half up), comparisons made on the rounded earnings per share and control number of the dilution test set after preference dividends (rule of the standard: IAS 33, para. 42, which refers to the para. 12 adjustment). Tax rate applicable to interest: 25%, retained by assumption, the tax department not having yet confirmed the rate.

Retrospective restatement and presentation of earnings per share: comparatives, discontinued operations and reconciliations: Restated 20X5 comparative

File of a listed group: basic and diluted earnings per share, retrospective restatements, presentation and disclosures (IAS 33)

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Guided mode

Section 1 of 8

Objective

In progress
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 33 workpaper
Level
Expert
Estimated time
≈ 60 min
Progress
0 / 4 steps done (review excluded)

Context

Selvane Group SA (fictitious entity), a listed parent, closes its consolidated accounts on 31 December 20X6. In 20X6 it made a rights issue with a bonus element, it has cumulative preference shares, options, a convertible bond and a contingent share agreement, and it disposed of a line of business. A 20X5 error was corrected retrospectively. The preparer builds the earnings per share file, which is submitted to a reviewer. 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

Restated comparative, reconciliation of denominators and earnings per share from discontinued operations

Purpose of the workpaper

Identify the events that change the number of shares with no change in resources, restate the number of shares and earnings per share of prior periods (adjustment factor, corrections of errors), compute earnings per share from continuing and discontinued operations, reconcile the basic and diluted numbers of shares, document the judgment on the price before detachment and prepare the draft presentation and note. Amounts and factors are case data; earnings per share is rounded to two decimals (case convention).

Questions of the file covered by this workpaper

  • Compute basic earnings per share for 20X6 (continuing operations and total) and for 20X5 (as published and restated).
  • Reconcile the basic denominator to the diluted denominator by class of instrument.
  • Compute basic and diluted earnings per share from discontinued operations.
  • Is the last price before detachment an appropriate basis for the adjustment factor?
  • What must be presented on the face of the income statement and reconciled in the notes?

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