IAS 36 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Recoverable amount: fair value less costs of disposal and value in use
Injection press: indications, recoverable amount and revised depreciation
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 36 workpaper
- Level
- Foundation
- Estimated time
- ≈ 45 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Plasturgie Delorme (a fictitious company) manufactures technical plastic parts and closes its accounts on 31 December. It applies the cost model to its property, plant and equipment. Its P450 injection press, acquired on 1 January 20X1, is depreciated on a straight-line basis over 10 years with no residual value. You are preparing the 20X4 year-end.
Assignment
Workpaper Recoverable amount.
Purpose of the workpaper
Determine fair value less costs of disposal (only incremental costs not recognised as liabilities), project the value-in-use cash flows for the asset in its current condition (without uncommitted restructuring, financing or tax), discount them at the pre-tax rate, retain the higher of the two amounts and document the key assumptions.
Questions of the file covered by this workpaper
- Calculate the fair value less costs of disposal of the press.
- Determine the recoverable amount of the press.
Documents in the file
Open the documents to pick out the relevant information.