IAS 37 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Recognition analysis of provisions and contingencies: Talvorne castings claim
Professional file: review of the provisions and contingencies of an industrial group
Section 1 of 7
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
- Expert
- Estimated time
- ≈ 35 min
- Progress
- 0 / 3 steps done (review excluded)
Context
The Halvoria group (fictitious entities) designs and manufactures agricultural and industrial equipment: irrigation pumps (Merquin), mechanical parts (Lunvalle Mécanique), a foundry (Vellmont), logistics (Rocbrune) and a distribution subsidiary in Spain (Junquera). You are the preparer of the group's provisions and contingencies review file at 31 December 20X5; the group financial controller is the reviewer. The financial statements will be authorised on 3 March 20X6. The ordinary movements of the year (utilisations) have already been recognised; the closing adjustments remain to be prepared.
Assignment
Recognition of provisions and contingencies workpaper (six situations).
Purpose of the workpaper
For each situation, check the scope, whether a present obligation arises from a past event, the probability of the outflow of resources and whether a reliable estimate can be made; classify the situation (provision, contingent liability disclosed or not, contingent asset, asset recognised), record the entries and pass the items of the note.
Questions of the file covered by this workpaper
- Analyse the file: which situations should be examined, which documents are useful and what information is missing?
- Classify each situation: provision, contingent liability, contingent asset or recognised asset.
- Calculate the provisioned share and the contingent liability share of the Quessandre obligation.
- Record the closing entries.
Documents in the file
Open the documents to pick out the relevant information.