Provisions roll-forward: Environment

Context

The Quentaro group (fictitious entities) manufactures and installs fuel storage equipment. You are in charge of reviewing provisions and contingencies at 31 December 20X4, before the financial statements are authorised on 25 February 20X5. The additions and utilisations of the year and the unwinding of the discount have been recognised during the year; the closing adjustments and the note remain to be finalised.

Assignment

Movement schedule of provisions workpaper (four classes).

Purpose of the workpaper

For a class of provisions, calculate the unwinding of the discount, revise the best estimate at the reporting date (additional provision or reversal), charge the amounts used, determine the reimbursement asset, reconcile the roll-forward with the ledger balance, record the entries and pass the items of the note.

Questions of the file covered by this workpaper

• Revise the litigation provision and assess the treatment of the expected reimbursements.
• Calculate the reimbursement asset relating to the environmental provision.
• Calculate the net expense presented for the environment class.
• Prepare the movement schedule by class and reconcile it with the general ledger.
• Record the closing entries.

• ScheduleProvisions trial balance at 31 December 20X4Open
• MemoQuality department memoOpen
• ContractSettlement agreement with Coradine ÉnergieOpen
• DocumentFile on the Belvaux depotOpen
• MemoTechnical department memo on the restorationOpen
• MemoLawyers' letter on contingenciesOpen
• MemoChief financial officer's proposalsOpen
• ScheduleGroup sales budgetOpen