IFRS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Remeasurement of the lease liability and lease modification: Tilleuls storage room
Professional file: year-end closing of the lease portfolio of a retail group
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 16 workpaper
- Level
- Expert
- Estimated time
- ≈ 50 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Groupe Valmorel (fictitious group) operates a chain of home furnishing stores. It reports at 31 December, applies IFRS 16 and leases almost all of its stores. You are in charge of the closing file of the lease portfolio at 31 December 20X5: inventory and analysis of the contracts, initial measurement of the new Tilleuls store, schedules for the year, amendments, sale and leaseback transaction of the logistics platform, subleases, entries, impact, note, responses to the reviewer's notes and conclusion. Under the group's policies (data of the file), right-of-use assets are depreciated on a straight-line basis over the lease term, with no residual value, no contract providing for a transfer of ownership or a purchase option, and operating sublease income is recognised on a straight-line basis. The IFRS 15 analysis of the transfer of the platform, the fair value of the platform (IFRS 13) and the restoration provision (IAS 37) are data of the file; deferred tax effects (IAS 12) are out of scope. The transactions of the year on the new contracts have not yet been recorded: the entries are presented with cash as the counterpart (teaching assumption).
Assignment
Workpaper Remeasurement and modification (Saint-Clair and Tilleuls storage room amendments).
Purpose of the workpaper
Qualify the event (reassessment of the term or of an option, change in an index or a guarantee, modification that is or is not a separate lease), determine the applicable rate, discount the revised payments, deal with any decrease in scope (gain or loss on the partial termination), then adjust the right-of-use asset for the remeasurement of the lease liability and record the entries.
Questions of the file covered by this workpaper
- How do you treat the decline in market rents and the two amendments?
- Remeasure the Saint-Clair lease liability and calculate the adjustment to the right-of-use asset.
- Which entries do you record for 20X5?
Documents in the file
Open the documents to pick out the relevant information.