IAS 37 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Measurement of the provision: Track restoration
Restoration of a quarry site: best estimate, discounting, unwinding and revision
Section 1 of 9
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 37 workpaper
- Level
- Intermediate
- Estimated time
- ≈ 40 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Gravelune Granulats SA (a fictitious entity) operates hard rock quarries. On 1 January 20X1, it brings into service a mobile crushing plant on the site of the Vaurieux quarry. You are preparing the financial statements for the year ended 31 December 20X1.
Assignment
Measurement of the provision workpaper (track, dismantling at inception and at the reporting date).
Purpose of the workpaper
Determine the best estimate of the expenditure (expected value, midpoint of a range or most likely outcome adjusted), justify how risks and future events are reflected, discount it at a pre-tax rate where the effect is material, then record the recognition entry.
Questions of the file covered by this workpaper
- Determine the best estimate of the expenditure taking future events into account.
- Calculate the present value of each expenditure and the provision at 1 January 20X1.
- Record the entries recognising the provision at 1 January 20X1.
Documents in the file
Open the documents to pick out the relevant information.