IAS 37 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Provisions roll-forward: Warranties
Professional file: review of the provisions and contingencies of an industrial group
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
- Expert
- Estimated time
- ≈ 45 min
- Progress
- 0 / 5 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
Movement schedule of provisions workpaper (five 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
- Determine the best estimate of the Corvella dispute and the treatment of the insurer's reimbursement.
- Prepare the movement schedule by class and reconcile it with the general ledger.
- Record the closing entries.
Documents in the file
Open the documents to pick out the relevant information.