Joint venturer and party without joint control: equity-method carrying amount, significant influence and separate financial statements

Context

Veltor Group SA (fictitious entity) is a joint operator of the Ormel terminal (40 %, by contract), acquires an interest in the Granit quarry and holds 25 % of Karval SAS. You prepare the 20X6 year-end note on the transactions with the joint operation, the acquisition, the separate financial statements and the classification.

Assignment

Karval: consolidated accounts and separate statements

Purpose of the workpaper

List the profit, the dividends and the percentage of the joint venturer, compute the share of profit or loss and the closing carrying amount under the IAS 28 equity method, then judge the significant influence of a party without joint control and the policy for the separate financial statements. Percentages and amounts are case data; the choice of method in the separate statements is a group policy, never presented as imposed by IFRS 11.

Questions of the file covered by this workpaper

• Karval: compute, under the equity method, the share of profit and then the closing carrying amount in the consolidated accounts.
• Separate statements: how does Veltor treat Ormel and Karval, and what is the amount of Karval under the cost policy?

• MemoGroup profile and case conventionsOpen
• ContractSale of an item of equipment to the Ormel joint operationOpen
• MemoAcquisition of an interest in the Granit quarryOpen
• ExtractKarval SAS: extract of the accounts and policy of the separate statementsOpen
• MemoNote of the chief financial officer on the classification of KarvalOpen
• InvoiceFinancial communication feesOpen