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: First quarter — change of cost formula
File on a half-year financial report: content and headings, year-to-date measurement, income tax at the estimated annual rate, change in policy and impaired goodwill (IAS 34)
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
- Expert
- Estimated time
- ≈ 75 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Altavia SA (fictitious entity), a maker of packaging machines, closes its accounts on 31 December and publishes a condensed report at the end of each quarter. The preparer builds the file of the 20X6 half-year report (period ended 30 June 20X6) submitted to a review check: content and headings of the condensed statement, year-to-date amount of the quarters, change in accounting policy on raw materials and restatement of the first quarter, income tax at the estimated annual effective rate revised in the second quarter, goodwill impairment loss and the question of its reversal at the annual closing. 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
Year-to-date amount, restatement of the change in policy and period
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.
- Must the published first quarter be restated for the change in the cost formula of raw materials?
- Compute the restated result of the first quarter.
- Compute the half-year profit before tax from the quarters.
Documents in the file
Open the documents to pick out the relevant information.