Cross-IFRS · Case studies (Step 3 of 5)
Practical case
Ondravex Civil Engineering SA, a fictitious public works company specialising in hydraulic structures (420 employees, a fleet of owned and leased plant), IFRS financial statements, year end 31 December, amounts in euros excluding VAT unless stated otherwise.
L1 · Guided · Year N — setting up the site (January to April N)
On 1 March N, Ondravex Civil Engineering signs a contract with the Régie des eaux du Val de Quilvane, a fictitious public water utility, to build a stormwater retention basin and its pumping station on land owned by the utility in Lunéard. To perform the work, Ondravex buys pipes that it stores in its depot, acquires a hydraulic excavator, uses a crane leased for three years and rents compactors for a few months. You follow the file over three years: setting up the site (level 1), year end N (level 2), amendment and year end N+1 (level 3), completion, disposal of plant and the N+2 notes (level 4). The case involves four standards: IFRS 15 for the contract, and IAS 2, IAS 16 and IFRS 16 for the resources used to perform it, to which IFRS 15 refers when they fall within another standard. From level 2 onwards, the applicable standards are no longer announced: you must identify them yourself. All figures are case data; teaching assumptions and professional judgements are flagged as such, and no method chosen by Ondravex is presented as required by a standard. Teaching assumption: amounts rounded to the euro, entries presented in summary form, tax effects ignored.
Standards involved: IFRS 15 Revenue from Contracts with Customers, IAS 2 Inventories, IAS 16 Property, Plant and Equipment and IFRS 16 Leases. Before measuring progress, you must know what the contract promises and which standard governs each of the resources used to perform it. Read the three documents, then answer in order: each question prepares the next.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Ondravex Civil Engineering SA, a fictitious public works company specialising in hydraulic structures (420 employees, a fleet of owned and leased plant), IFRS financial statements, year end 31 December, amounts in euros excluding VAT unless stated otherwise.
Initial event · L1·Year N — setting up the site (January to April N) · Current stage
Standards involved: IFRS 15 Revenue from Contracts with Customers, IAS 2 Inventories, IAS 16 Property, Plant and Equipment and IFRS 16 Leases. Before measuring progress, you must know what the contract promises and which standard governs each of the resources used to perform it. Read the three documents, then answer in order: each question prepares the next.
Pieces added
New period · L2·Year N — year end at 31 December N · Upcoming: unlocks after the current stage
New period · L3·Year N+1 — amendment of 1 April and year end at 31 December N+1 · Upcoming: unlocks after the current stage
New period · L4·Year N+2 — completion, disposal, year end and notes at 31 December N+2 · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
3 documents to work from at this level.
Document 1Contract
First level: all the data is in the brief and the pieces of this level.
5 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each item in the file according to the standard that primarily governs its accounting in Ondravex's books.
The construction contract signed with the utility
The cast-iron pipes held at the depot
The purchased hydraulic excavator
The crane leased for three years
The compactors rented for five months
The site mobilisation costs (192,000)
The structure under construction on the utility's land
4 more questions will appear once the current question is complete.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Answer every part to submit the level and see the conclusion.
Normative references