IAS 40 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Fair value tracking file and reconciliation: Property Q
File of an investment property portfolio: classification, measurement, transfers and disclosures
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 40 workpaper
- Level
- Expert
- Estimated time
- ≈ 60 min
- Progress
- 0 / 5 steps done (review excluded)
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
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
- Which model does each company apply? Justify.
- Compute the fair value changes of P and Q.
- Reconcile the carrying amount of the portfolio of Valmont Investissement.
- Record the acquisition of N and its 20X5 interest, the changes of P and Q, the transfer of T, the disposal of S and the depreciation of V.
Documents in the file
Open the documents to pick out the relevant information.