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IFRS 10Case studies (Step 3 of 5)

Practical case

Step 3 of 5
File · Progressive casePath L1 → L4L1 · Fundamental

Orvalis: from controlling Brémont to losing that control

Orvalis SA, a fictitious industrial group, IFRS consolidated financial statements, year-end 31 December.

2 documents5 tasks
0 / 5 tasks completed
Period
1 January N
Standards
IFRS 10 — Consolidated Financial Statements
Levels
0 / 4 levels validated
Current level
L1 · Guided≈ 120 min
Assistance levelFull guidance · strong assistance
  • Method: shown
  • Checklist: shown
  • Hints: shown
  • Step-by-step work: shown

Case brief

L1 · Guided · 1 January N

Level 1: who controls what, and the combination

Progressive case in four levels around Orvalis's holdings: (1) control and combination with elimination of the investment; (2) intragroup eliminations and attribution to non-controlling interests, including a deficit balance; (3) purchase of shares from third parties without loss of control, role as a fund manager and the standard's silences; (4) loss of control, retained interest, other comprehensive income and linked arrangements. Percentages, fair values and choices in the case are case data; rounding follows a case convention, not a rule of the standard.

Orvalis SA holds shares in two companies. You establish whether it controls them, then prepare the combination of the company it controls. The standards involved are announced.

Fundamental level: the method, help and references are shown.

Method

  1. Read the brief and the assignment.
  2. Open each document and spot the relevant data.
  3. Carry out the work in the suggested order.
  4. Submit, then read the conclusion and the model answer.

File checklist

  • Open each piece (0 / 2 consulted) · to do
  • Answer the questions of the level (0 / 5) · to do
  • Validate the level, then read the conclusion · to do

Events

The file, period by period

2 / 6 stages reached

  1. Context · Dated fact of the file

    Orvalis: from controlling Brémont to losing that control

    Orvalis SA, a fictitious industrial group, IFRS consolidated financial statements, year-end 31 December.

  2. Initial event · L11 January N · Current stage

    Level 1: who controls what, and the combination

    Orvalis SA holds shares in two companies. You establish whether it controls them, then prepare the combination of the company it controls. The standards involved are announced.

    Pieces added

    • Orvalis holdings sheet
    • Brémont combination data

  3. New period · L231 December N · Upcoming: unlocks after the current stage

    Upcoming stage

  4. New period · L3Year N+1 · Upcoming: unlocks after the current stage

    Upcoming stage

  5. New period · L4Year N+2 · Upcoming: unlocks after the current stage

    Upcoming stage

  6. Conclusion · Upcoming: unlocks after the current stage

    Upcoming stage

Documents

Case documents

2 documents to work from at this level.

Document 1Document

Orvalis holdings sheet

The facts are teaching assumptions; the rights described are substantive and currently exercisable unless stated otherwise.

EntityOrvalis's voting rightsFacts
Brémont SA (furniture)75%Orvalis appoints the majority of the board, which decides on the range, prices and investments. Orvalis receives the dividends and bears its share of losses
Calisto SA (packaging)35%Another shareholder holds 55% and appoints the board. Orvalis has a right to oppose a fundamental change in Calisto's activity

Data

Facts of the file

Entity
Orvalis SA, a fictitious industrial group, IFRS consolidated financial statements, year-end 31 December.
Period
1 January N
Current level
L1 · Guided
Standards
IFRS 10 — Consolidated Financial Statements

Pieces carried over from earlier levels

First level: all the data is in the brief and the pieces of this level.

Questions

5 parts to answer, marked when you submit the level.

  • Information to identify1
  • Questions2
  • Calculations1
  • Journal entries1

Information to identify

Find the useful facts in the pieces before concluding.

Part 1 · Classification · Recognition

For Brémont, match each fact to the element of control it illustrates.

  1. Orvalis appoints the majority of Brémont's board

  2. Orvalis bears its share of Brémont's losses

  3. Pricing decisions taken by the board make the dividends Orvalis receives vary

4 more questions will appear once the current question is complete.

Complete the question to continue.

Workspace

Your working draft for this file: points noted, leads, intermediate calculations.

Saved on this device only; never graded.

Conclusion

Answer every part to submit the level and see the conclusion.

Normative references

  • IFRS 10 §7
  • IFRS 10 §B22
  • IFRS 10
  • IFRS 10 §B58
  • IFRS 10 §B94
  • IFRS 10 §23
  • IFRS 10 §B96
  • IFRS 10 §25
  • IFRS 10 §B98