IFRS 13 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Fair value measurement memo
Principal market, most advantageous market, transaction and transport costs: Mécanor's hydraulic press
Section 1 of 8
Objective
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 IFRS 13 workpaper
- Level
- Intermediate
- Estimated time
- ≈ 60 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Mécanor SA (fictitious entity) manufactures industrial equipment and accounts for its presses under the revaluation model. At 31 December 20X5, the fixed assets committee must measure a working hydraulic press located in the Lyon plant at fair value, and hesitates between two used-equipment markets.
Assignment
Fair value measurement memo
Purpose of the workpaper
For each item measured (one instance per item), describe the item and its unit of account, compare the markets available (net amount received, volume and activity), document the highest and best use of a non-financial asset (value under each use less conversion costs), reconcile the indications of the techniques (weighting, expected cash flow, present value), then justify the three judgements: reference market, highest and best use, unobservable inputs.
Questions of the file covered by this workpaper
- Compute the net amount received in each market.
- Which market maximises the net amount received?
- Which market underlies the measurement? Justify.
Documents in the file
Open the documents to pick out the relevant information.