IAS 34 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Bridge between year-to-date and period: seasonal revenues, uneven costs, change in accounting policy and change in estimate in the final interim period: Second-quarter revenue
Year-to-date measurement: same policies, seasonal revenues, uneven costs, estimates and materiality
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 34 workpaper
- Level
- Intermediate
- Estimated time
- ≈ 75 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Estivale SA (fictitious entity), a maker of garden furniture whose activity is highly seasonal, closes its accounts on 31 December and publishes a report at the end of each quarter. You prepare the report for the second quarter of 20X6 (period ended 30 June 20X6). The chief financial officer proposes five treatments: a revenue recognition method simpler than at year-end, smoothed revenue, the deferral of a repair, the early recognition of a maintenance shutdown and no note on a dispute settlement.
Assignment
Bridge between year-to-date and period, seasonal revenues and uneven costs
Purpose of the workpaper
Record the year-to-date amounts and the published amounts of the previous periods, the seasonal or uneven nature of the revenues and costs, the effect of a change in accounting policy and the feasibility of restating it, then the revised annual amount of an estimate. Reconcile the year-to-date amount and the period, assess the treatment of uneven revenues and costs (neither anticipated nor deferred unless the same treatment would be appropriate at the annual closing), compute the restated amount or judge prospective application, and prepare the information for the annual notes. The facts are case data; each conclusion remains a supported judgment.
Questions of the file covered by this workpaper
- Compute second-quarter revenue from the year-to-date amounts.
- Can the proposed smoothed revenue be presented for the second quarter?
- Compute the half-year profit before tax from the quarters.
- Reconcile the opening year-to-date amount, the profit of the quarter and the year-to-date amount presented in the draft.
- Can half of the cost of the August maintenance shutdown be recognised in the first half?
Documents in the file
Open the documents to pick out the relevant information.