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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 8L4 · Expert

Documents

Memo from the chief financial officer

Memo

Memo from the chief financial officer

Laboratoires Pelvanne SA (fictitious entity) is preparing its 20X5 statements (20X4 comparative). The CFO proposes three treatments: (a) the loss allowance on receivables, so far computed with an ageing matrix, is now computed with a roll-rate model made possible by the new collection software; it goes from 268,000 to 312,000; he wants to present this as a change in policy restated, "so as not to penalise 20X5"; (b) the provision for product returns goes from 150,000 to 118,000 thanks to the more detailed 20X5 return statistics; (c) a 26,000 credit note granted to a customer was posted twice in December 20X3; the duplicate appeared in the customer's statement received in January 20X4, before the 20X3 statements were approved. Draft 20X5 profit before (a) and (b): 1,250,000.

Change classification matrix: Item (c) — credit note of 26,000

Receivables impairment: change in technique, revision of a provision or error? Classification and disclosure

3 documents7 sections to document
0 / 4 sections completed
Guided mode

Section 1 of 7

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
Expert
Estimated time
≈ 30 min
Progress
0 / 3 steps done (review excluded)

Context

Laboratoires Pelvanne SA (fictitious entity) is preparing its 20X5 statements. The CFO proposes three treatments that you must approve or correct, with little guidance.

Assignment

Classification matrix: items (a), (b) and (c)

Purpose of the workpaper

For each change of the period (one instance per change), describe the facts and the date on which the information was available, review the definitions, the conditions for a change in accounting policy and the nature of an estimate, measure where useful what the classification puts at stake (gap between prospective treatment and retrospective restatement), then classify the change, give the rationale and route it to its treatment and disclosures.

Questions of the file covered by this workpaper

  • Classify the three items (a), (b) and (c).
  • Is the CFO's proposal for (a) acceptable?
  • Measure what the classification of (b) puts at stake for 20X5 profit.

Documents in the file

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