Cross-IFRS · Case studies (Step 3 of 5)
Practical case
Halvorne Thermique SA, a fictitious industrial group that designs and manufactures industrial burners and heat-treatment furnaces (620 employees, two plants), IFRS consolidated financial statements, year end 31 December, amounts in euros.
L1 · Guided · Year N — year end 31 December N: getting to know the file
You are a manager at Marvejac Audit, a fictitious firm that audits Halvorne Thermique's consolidated financial statements. For the 31 December N year end, the finance department hands you its file on the non-current assets of the Burners cash-generating unit (CGU): fixed asset register, cost breakdown of a new furnace, file on a development project, lease contracts, impairment test and draft note. This is not a guided exercise: as on an engagement, you get to know the file and spot the issues (level 1), perform the review work and the calculations (level 2), propose the adjusting entries without the standards being announced (level 3), then exercise your judgement, prepare the summary of adjustments and review the draft note (level 4). All figures are case data; teaching assumptions and professional judgements are flagged as such, and no method chosen by Halvorne is presented as required by the standards. Out of scope: tax effects (IAS 12), the initial measurement of goodwill (IFRS 3), provisions (IAS 37) and auditing standards, whose thresholds are engagement data. Teaching assumption: amounts rounded to the euro.
Standards involved in the file: IAS 16 Property, Plant and Equipment, IAS 38 Intangible Assets, IFRS 16 Leases and IAS 36 Impairment of Assets. Before recalculating anything, an auditor maps the file: which standards apply to which items, which tests are mandatory this year, which of the client's treatments look abnormal and in what order to carry out the work. Read the two documents, then answer in order.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Halvorne Thermique SA, a fictitious industrial group that designs and manufactures industrial burners and heat-treatment furnaces (620 employees, two plants), IFRS consolidated financial statements, year end 31 December, amounts in euros.
Initial event · L1·Year N — year end 31 December N: getting to know the file · Current stage
Standards involved in the file: IAS 16 Property, Plant and Equipment, IAS 38 Intangible Assets, IFRS 16 Leases and IAS 36 Impairment of Assets. Before recalculating anything, an auditor maps the file: which standards apply to which items, which tests are mandatory this year, which of the client's treatments look abnormal and in what order to carry out the work. Read the two documents, then answer in order.
Pieces added
New period · L2·Year N — review work on the evidence (January N+1) · Upcoming: unlocks after the current stage
New period · L3·Year N — proposed adjustments (end of January N+1) · Upcoming: unlocks after the current stage
New period · L4·Year N — completion of the file and summary for the partner (February N+1) · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
2 documents to work from at this level.
Document 1Memo
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 · Matching · Recognition
Match each item in the file with the standard that governs the question raised.
Tap a statement, then its match.
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