IFRS 12 · Case studies (Step 3 of 5)
Case study
Taleron Group SA (fictitious entity) bought in 20X6 shares of Dorval SA from third parties without losing control, lost control of Ebrel SA while keeping 20 %, supports a consolidated structured entity and classifies an associate as held for sale. You prepare the corresponding IFRS 12 disclosures.
Your assignment
Compute the effect of the purchase of Dorval on the equity of the owners of the parent and record the entry; compute the part of the gain on loss of control of Ebrel attributable to the remeasurement and state what must be presented; deal with the support to the consolidated structured entity; state the effect of the classification of Fabre as held for sale; present the effect on the financial statements and conclude. One document is not useful.
Work on this file as you would in practice: read the situation, open the documents, sort the useful information, then carry out the work requested. The solution is revealed once you submit.
Advanced level: no help, the work is grouped by kind.
6 documents: open each one to read it.
Document 1Memo
Taleron Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. Case conventions: amounts in EUR; case convention (pedagogical assumption, not attributed to IFRS 12): the total gain on loss of control of Ebrel is a datum under IFRS 10; the exemption from summarised financial information for interests held for sale applies to the year; the support to Vitrine is voluntary; the entry is illustrative.
The figures of the documents, gathered for your work.
| Item | Value | Found in |
|---|---|---|
| Non-controlling interests of Dorval before the purchase | €1,200,000.00 | |
| Non-controlling interests acquired | €400,000.00 | |
| Price paid to third parties | €460,000.00 | |
| Fair value of the retained investment | €360,000.00 | |
| Carrying amount of the retained investment before remeasurement | €300,000.00 | |
| Total gain on loss of control | €140,000.00 | |
| Voluntary financial support | €80,000.00 | |
| Carrying amount of the interest in Fabre | €250,000.00 | |
| Insurance premium | €31,000.00 |
Not every document matters: identify those that affect the accounting treatment.
Part 1 · Classification · Analysis
Sort each document: does it affect the accounting treatment?
Drag each item into its category, or tap the category under the item.
Group profile and case conventions
Dorval SA: purchase from third parties
Ebrel SA: sale with loss of control
Vitrine Funding: financial support
Fabre SA: classification as held for sale
Head-office insurance premium
9 tasks in the order of the file. Calculations, entries and effects on the financial statements are marked; written answers are self-assessed against the solution.
Task 1Analysis
Dorval: what is the nature of the purchase from third parties, and which IFRS 12 schedule must be presented?
Task 2Calculation
Dorval: compute the effect on the equity attributable to the owners of the parent.
Part 1 · Calculation
Dorval: compute the effect on the equity attributable to the owners of the parent.
Task 3Journal entries
Record the purchase of non-controlling interests of Dorval.
Part 1 · Journal entry · Journal entries
Entry 1 of 1
One line = one account and one side. Add a line if the entry needs more; the balance check updates live.
Line 1
Line 2
Line 3
Task 4Calculation
Ebrel: compute the part of the gain attributable to the remeasurement of the retained investment.
Part 1 · Calculation
Ebrel: compute the part of the gain attributable to the remeasurement of the retained investment.
Task 5Analysis
Ebrel: what must be presented about the gain on loss of control?
Task 6Analysis
Vitrine Funding: which disclosures on the risks of this consolidated structured entity?
Task 7Professional judgement
Fabre: does the interest classified as held for sale remain within the scope of IFRS 12, and with which exemption?
Task 8Effects on the financial statements
What is the effect of the entry on the consolidated financial statements?
Part 1 · Classification · Analysis
State the direction of the effect on each financial statement aggregate.
Financial position (balance sheet)
Profit or loss
Other comprehensive income
Equity
Part 2 · Calculation · Analysis
Quantify the effect on the aggregates concerned.
Result: Amount of the effect — Equity
Task 9Conclusion
Write the conclusion.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Complete every item of the file to submit it (0 / 11).
Document this file
These working papers use the data and results of this case.
Normative references