IAS 38 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Indefinite life and impairment
Broadcasting licences: finite or indefinite useful life
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 38 workpaper
- Level
- Advanced
- Estimated time
- ≈ 40 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Ondes Atlantique (a fictitious radio group) closes its accounts on 31 December and applies the cost model to its intangible assets. It holds a national broadcasting licence, licence A, regarded since its acquisition as having an indefinite useful life, and has just acquired a digital frequency licence, licence B. You are preparing the 20X1 year-end entries and the note to the financial statements.
Assignment
Workpaper Indefinite life, impairment test and revision.
Purpose of the workpaper
Review at each year-end whether the indefinite life is still supported, organise the annual impairment test (recoverable amount provided under IAS 36), record the impairment loss and, if the life becomes finite, calculate the prospective charge. Prepare the disclosures.
Questions of the file covered by this workpaper
- Is the indefinite useful life of licence A still supported at 31 December 20X1? What are the consequences?
- Calculate the impairment loss on licence A at 31 December 20X1.
- Calculate the amortisation charge for licence A for 20X2.
- Which entries do you record at 31 December 20X1?
- Which amortisation entry for licence A will you record in 20X2?
Documents in the file
Open the documents to pick out the relevant information.