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IAS 8Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors — wording before IFRS 18Applicable today

Applies to annual periods beginning before January 1, 2027.

Mission · workpaperWorkpaper · IAS 8L2 · Intermediate

Documents

Warranty claim statistics

Schedule

Warranty claim statistics

Maison Quérande SA (fictitious entity) sells household appliances with a two-year warranty. In October 20X5, internal audit found that, since 20X3, the spreadsheet used for the warranty provision had left out the "cooking" range, although the claim statistics for that range were available every year before the statements were approved. Omitted provision, recomputed with the statistics of the time: 80,000 at 31 December 20X3 and 128,000 at 31 December 20X4.

Retrospective restatement schedule

Provision omitted and discovered the following year: restatement of comparatives and tax effect

4 documents8 sections to document
0 / 5 sections completed
Guided mode

Section 1 of 8

Objective

In progress
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 8 workpaper
Level
Intermediate
Estimated time
≈ 50 min
Progress
0 / 4 steps done (review excluded)

Context

Maison Quérande SA (fictitious entity) is preparing its 20X5 statements, which present 20X4 as comparative. In October 20X5, internal audit found a warranty provision omitted since 20X3. You prepare the restatement.

Assignment

Restatement schedule for the omitted warranty provision

Purpose of the workpaper

For a change in accounting policy applied retrospectively or a prior period error, determine the cumulative pre-tax effect at the beginning of the earliest period presented (or of the earliest practicable period), its tax effect at the rate given by the case and the net adjustment to opening retained earnings; isolate the effect specific to the comparative period, restate the line item concerned and the comparative profit, reconcile restated equity, then post the entries and prepare the disclosures.

Questions of the file covered by this workpaper

  • Isolate the part of the error relating to the 20X4 comparative period.
  • Compute the tax effect at the opening of 20X4 and for 20X4, and the net amounts.
  • Determine restated retained earnings at 1 January 20X4.
  • Restate other operating expenses, provisions and profit for 20X4.
  • Reconcile restated retained earnings at 31 December 20X4.
  • Present the restatement entries: 20X4 opening balances and 20X4 comparative column.

Documents in the file

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