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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

Group closing memo

Memo

Group closing memo

Groupe Vasquerel (fictitious entity, DIY and garden retail) is preparing its 20X5 consolidated statements, which present 20X4 as comparative; tax rate of 25% for all periods. Points raised by the finance department: (a) volume rebates owed to suppliers of Vasquerel Négoce were never recognised (D2); (b) Vasquerel Bricolage moves from weighted average cost to FIFO, in line with the rest of the group (D4); (c) Vasquerel Jardin also adopts FIFO, but its data before 20X5 are lost (D5); (d) the useful life of the racking is revised (D6); (e) a claim against a carrier, not recognised until then, was settled in 20X5 by a receipt of 75,000, included in the draft 20X5 profit of 3,075,000; the CFO proposes to take it to opening equity; (f) a policy must be set for packaging reuse credits (D8); (g) a new IFRS has been issued and will apply from 1 January 20X7 (D9).

Retrospective restatement schedule: Group restatement — 20X4

Review file of accounting changes and restatements of a retail group

11 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

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
≈ 50 min
Progress
0 / 5 steps done (review excluded)

Context

Groupe Vasquerel (fictitious entity) is closing its 20X5 consolidated statements. The closing memo combines a prior period error, two changes in policy of which one is partly impracticable, a change in estimate, a settled claim, a policy to be developed and an IFRS issued but not applied. You prepare the review file, submitted to the reviewer before sign-off.

Assignment

Group restatement schedule

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

  • Measure Vasquerel Bricolage inventory at 31 December 20X3 under both formulas.
  • Determine the cumulative effect of the change at the opening of 20X4 and the effect specific to 20X4.
  • Isolate the part of the error relating to 20X4.
  • Compute the tax effects and net amounts.
  • Determine restated retained earnings at 1 January 20X4.
  • Restate the cost of purchases and 20X4 profit, then reconcile equity at 31 December 20X4.
  • Compute the Vasquerel Jardin adjustment at 1 January 20X5 and the restated 20X5 opening equity.
  • Present the entries: restatements, Vasquerel Jardin adjustment, racking and reuse credits.

Documents in the file

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