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IAS 34Case studies (Step 3 of 5)

Case study

Step 3 of 5
Practical caseIAS 34 · IAS 33L1 · Fundamental

Quarterly report of a listed company: publication not imposed by the standard, minimum content, condensed statements and periods presented

9 documents9 tasks≈ 45 min
0 / 11 items completed
Standards
IAS 34 — Interim Financial ReportingIAS 33 — Earnings per Share
Assistance levelFull guidance · strong assistance
  • Method: shown
  • Checklist: shown
  • Hints: shown
  • Step-by-step work: shown

Case brief

Situation

Brassac SA (fictitious entity), a maker of industrial pumps whose shares are traded on a regulated market, closes its annual accounts on 31 December. You review the draft financial report for the third quarter of 20X6 (period ended 30 September 20X6) before it is published: source of the obligation to publish, components of the report, headings and subtotals of the condensed statement, earnings per share, periods and comparatives, nine-month year-to-date amount and recognition of a September expense.

Your assignment

Say whether the standard requires Brassac to publish a quarterly report; identify the minimum component missing from the draft; say whether the condensed statement of financial position keeps every heading and subtotal of the latest annual statements; say what is missing from the statement presenting profit or loss; point out the errors in periods and comparatives; compute the nine-month year-to-date revenue; record the September energy expense and present its effect on the financial statements; conclude. One document is not useful.

Work on this file as you would in practice: read the situation, open the documents, sort the useful information, then carry out the work requested. The solution is revealed once you submit.

Fundamental level: the method, help and references are shown.

Method

  1. Read the brief and the assignment.
  2. Open each document and spot the relevant data.
  3. Carry out the work in the suggested order.
  4. Submit, then read the conclusion and the model answer.

File checklist

  • Open each piece (0 / 9 consulted) · to do
  • Sort the information in the pieces · to do
  • Carry out the work (0 / 11) · to do
  • Submit the file, then assess yourself · to do

Documents

File documents

9 documents: open each one to read it.

Document 1Memo

Company profile and case conventions

Brassac SA (fictitious entity) makes industrial pumps; its shares are traded on a regulated market and it closes its annual accounts on 31 December; its functional currency is the euro. Case conventions: amounts in EUR; case convention (pedagogical assumption, not attributed to the standard): the entity publishes a condensed set of financial statements; the entry is illustrative and uses a generic expense account and a generic payable account; the computation of earnings per share belongs to the IAS 33 course.

Data

Key data from the documents

The figures of the documents, gathered for your work.

ItemValueFound in
Reports per year required by the market4 units
Minimum components5 units
Components present in the draft4 units
Lines of the latest annual statements8 units
Annual lines kept in the draft4 units
Annual lines not kept4 units
Revenue of the first quarter€4,120,000.00
Revenue of the second quarter€4,380,000.00
Revenue of the third quarter€3,950,000.00
Energy expense of September€41,000.00

Sorting the information

Not every document matters: identify those that affect the accounting treatment.

Part 1 · Classification · Analysis

Sort each document: does it affect the accounting treatment?

Drag each item into its category, or tap the category under the item.

To sort9

  • Company profile and case conventions

  • Market rule and question from management

  • Content of the draft third-quarter report

  • Headings and subtotals: annual statements and draft

  • Periods and comparatives planned in the draft

  • Earnings per share: situation of Brassac

  • Quarterly revenue of 20X6

  • Energy invoice for September 20X6

  • Catalogue of a forklift maker

Relevant to the treatment0

    No effect0

      Questions

      Work programme

      9 tasks in the order of the file. Calculations, entries and effects on the financial statements are marked; written answers are self-assessed against the solution.

      1. Task 1Analysis

        Does the standard require Brassac to publish a quarterly report, and where does the content of the report come from?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      2. Task 2Analysis

        Which minimum components of a condensed report does the draft contain, and which is missing?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      3. Task 3Analysis

        Does the condensed statement of financial position keep each heading and subtotal of the latest annual statements?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      4. Task 4Analysis

        What is missing from the statement presenting profit or loss as regards earnings per share?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      5. Task 5Analysis

        What errors does the draft contain on the periods and comparatives presented?

        Set out the facts, the question raised, then your analysis.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      6. Task 6Calculation

        Compute the nine-month year-to-date revenue from the quarters.

        Start from the data in the pieces, set the formula, check the unit and the order of magnitude.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Calculation

        Compute the nine-month year-to-date revenue from the quarters.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      7. Task 7Journal entries

        Record the energy expense of September.

        Identify the accounts affected and the direction of each movement; check the balance.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Journal entry · Journal entries

        Entry 1 of 1

        One line = one account and one side. Add a line if the entry needs more; the balance check updates live.

        1. Line 1

        2. Line 2

        TotalsDebit0Credit0

      8. Task 8Effects on the financial statements

        What is the effect of the entry on the financial statements?

        For each financial statement, state the line affected, the direction and the amount.

        Part 1 · Classification · Analysis

        State the direction of the effect on each financial statement aggregate.

        1. Financial position (balance sheet)

        2. Profit or loss

        3. Other comprehensive income

        4. Equity

        Calculator

        Click in an answer field to be able to insert the result.

        Part 2 · Calculation · Analysis

        Quantify the effect on the aggregates concerned.

        1. €
        2. €

        Checks

        • 0 / 2 steps entered
        • Amounts readable

        Result: Amount of the effect — Equity

      9. Task 9Conclusion

        Write the conclusion.

        Write a conclusion that cites the facts and the treatment chosen.

        This answer is not marked automatically: after submitting, you will compare it with the solution.

      Workspace

      Your working draft for this file: points noted, leads, intermediate calculations.

      Saved on this device only; never graded.

      Conclusion

      Submission and solution

      Complete every item of the file to submit it (0 / 11).

      Document this file

      These working papers use the data and results of this case.

      Normative references

      • IAS 34 §8
      • IAS 34 §10
      • IAS 34 §11