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IFRS 16Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 16L2 · Intermediate

Documents

Framework contract between Marval and TransAlp

Contract

Framework contract between Marval and TransAlp

Framework contract signed on 1 December 20X1 (inception date) between Marval and TransAlp, effective 1 January 20X2 (commencement date). Lot A, dedicated truck: the refrigerated truck registered FT-208-KM is specified in the contract; it is parked at Marval's depot and used only for Marval; Marval decides every day on routes, schedules, loads and whether or not to use the truck; TransAlp provides the driver, who follows Marval's instructions, and the maintenance; TransAlp may replace the truck only during a repair; carrying hazardous goods and exceeding the maximum load are prohibited. Consideration for lot A: 150,000 a year for the truck, the driver and the maintenance, payable in equal monthly instalments in arrears. Lot A is binding for 3 years; only Marval may terminate it at the end of year 3 against a termination payment of 150,000, otherwise it runs for a year 4; Marval may then extend it for 2 years at the market price then prevailing. Lot B, regional distribution: TransAlp delivers Marval's parcels with the vans of its 60-vehicle fleet, which it chooses and replaces at any time without Marval's agreement to optimise its rounds; the vans are parked at TransAlp's depots; price per delivery.

Contract analysis: scope, existence of a lease, components and exemptions: Lot A — related services

Analysis of a transport contract: lease or service, components, term and exemptions

5 documents8 sections to document
0 / 5 sections completed
Guided mode

Section 1 of 8

Objective

In progress
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 16 workpaper
Level
Intermediate
Estimated time
≈ 40 min
Progress
0 / 4 steps done (review excluded)

Context

Marval Distribution (a fictitious company), a food wholesaler, closes its accounts on 31 December and applies IFRS 16. At the end of 20X1, it enters into a two-lot framework contract with the carrier TransAlp Logistique (a fictitious company) and, with the lessor Tabloc (a fictitious company), a contract for tablets for its warehouse. You analyse these contracts and prepare the 20X2 year-end.

Assignment

Workpaper Contract analysis: scope, existence of a lease, components and exemptions.

Purpose of the workpaper

Check that the contract is within the scope of IFRS 16, determine at the inception date whether it is or contains a lease (identified asset, substantially all the benefits, right to direct the use), consider combination with other contracts, separate the components and allocate the consideration, then conclude on whether a lessee exemption applies.

Questions of the file covered by this workpaper

  • Does lot A contain a lease? Explain.
  • Does lot B contain a lease? Explain.
  • Allocate the annual consideration of lot A between its components.
  • Can the tablet contract qualify for an exemption?
  • Calculate the total payments, the monthly expense and the 20X2 expense for the tablets.

Documents in the file

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