Classification and mixed-use file: Property M2 — services

Context

Groupe Valmont (fictitious entities) comprises two companies that each publish IFRS financial statements: Valmont Investissement SA, which applies the fair value model to its investment property, and Valmont Résidences SA, which applies the cost model. For the 31 December 20X5 year-end, you prepare the portfolio file: classification of two properties, acquisition with deferred payment, fair value changes, two situations of change in use, a disposal, the depreciation of a property at cost and the disclosures. Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.

Assignment

Classification file

Purpose of the workpaper

For each property (one instance per property), describe the facts, state whether the portions can be sold separately, enter the share occupied by the entity and the share of services in the whole arrangement, then justify the classification (whole investment property, separate accounting or owner-occupied property) and whether the services are significant. The standard sets no thresholds: classification is a matter of judgement and is documented by the facts relied on.

Questions of the file covered by this workpaper

• Compute the occupied share of M1 and the share of services of M2.
• Classify M1. Justify.
• Classify M2. Justify.

• MemoEngagement letterOpen
• ScheduleProperty M1Open
• ContractProperty M2Open
• ContractProperty N acquired with deferred paymentOpen
• ScheduleAppraisals of properties P and QOpen
• ExtractPortfolio registerOpen
• MinutesProperty TOpen
• MinutesProperty UOpen
• ContractDisposal of property SOpen
• ScheduleProperty V under the cost modelOpen
• ExtractReply from the legal departmentOpen
• MemoTraining budgetOpen