IAS 40 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Fair value tracking file and reconciliation: Portfolio reconciliation
Fair value portfolio: change in profit or loss and annual reconciliation
Section 1 of 8
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 40 workpaper
- Level
- Advanced
- Estimated time
- ≈ 60 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Immobilière Orsay SA (fictitious entity) applies the fair value model to all its investment property. At the 31 December 20X5 year-end, it holds three properties: P1 and P2, already held at the opening date, and P3, acquired in 20X5. An independent appraiser provides the closing values.
Assignment
Fair value tracking file
Purpose of the workpaper
For each property (one instance per property), enter the opening carrying amount, the appraisal value, the balances already recognised separately (prepaid rents; furniture included in the fair value is not recognised separately) and the movements, compute the amount to carry in assets, the fair value change (gain or loss) and prepare the profit or loss entry. A portfolio instance reconciles the opening and closing carrying amounts. Justify the choice of model and the reliability of fair value.
Questions of the file covered by this workpaper
- Compute the amount to carry in assets for P2.
- Compute the fair value change of P1 and P2.
- Is the fair value model also appropriate for P3? Justify.
- Reconcile the carrying amount of the portfolio.
- Record the fair value changes.
Documents in the file
Open the documents to pick out the relevant information.