IFRS 13 · Workpapers (Step 4 of 5)
Workpaper assignment
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Level 3 reconciliation and sensitivity
Level 3 instruments: classification, reconciliation and sensitivity
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
- Expert
- Estimated time
- ≈ 45 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Orbis Capital (fictitious entity) is an investment company whose financial instruments are measured at fair value. For the 31 December 20X5 closing, the valuation department sends the instruments, the level 3 movements and sensitivities; you prepare the classification in the hierarchy, the reconciliation and the note.
Assignment
Level 3 reconciliation and sensitivity
Purpose of the workpaper
For each category of level 3 items measured on a recurring basis (one instance per category), take the opening balance and the movements of the period (profit or loss, other comprehensive income, purchases, sales and settlements, transfers into and out of level 3), rebuild the closing balance, compare it with the reported balance, document the transfers, then prepare the reconciliation and the note on sensitivity to unobservable inputs.
Questions of the file covered by this workpaper
- Reconcile the level 3 balance and compare it with the reported balance.
- Prepare the table by level and the level 3 sensitivity note.
Documents in the file
Open the documents to pick out the relevant information.