Depreciation file of a property at cost

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

Depreciation file at cost

Purpose of the workpaper

For each property under the cost model (one instance per property or part), enter the cost, the residual value, the useful life and the accumulated depreciation and impairment, compute the annual charge (overall or by component) and the carrying amount, then prepare the depreciation or impairment entry. Enter the fair value to be disclosed in the notes.

Questions of the file covered by this workpaper

• Compute the annual charge of V.
• Compute the carrying amount of V.
• 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.

• 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