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IFRS 16Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 16L4 · Expert

Documents

Planning memo of the file

Memo

Planning memo of the file

Planning memo of the closing file at 31 December 20X5 (consolidated financial statements of Groupe Valmorel). Contracts to examine: Darnac logistics services, lease of the Tilleuls store and its amendment, temporary unit at the station and sublease of its corner, sales staff tablets, leases of the Saint-Clair and Galerie Nord stores, sale and leaseback of the Morvan logistics platform, sublease of the Galerie Nord store. Group policies: short-term lease exemption elected for the class of retail premises; low-value asset exemption elected lease by lease; right-of-use assets depreciated on a straight-line basis over the lease term, with no residual value; operating sublease income recognised on a straight-line basis. The routine 20X5 entries of the Saint-Clair and Galerie Nord leases are recorded; those of the new contracts are not. Deferred tax effects are dealt with in another file.

Lessor accounting: classification, finance lease and operating lease: Galerie Nord sublease

Professional file: year-end closing of the lease portfolio of a retail group

20 documents7 sections to document
0 / 4 sections completed
Guided mode

Section 1 of 7

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
Expert
Estimated time
≈ 55 min
Progress
0 / 3 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 Lessor accounting (corner and Galerie Nord subleases).

Purpose of the workpaper

Classify the lease at the inception date using the situations and indicators of a transfer of substantially all the risks and rewards; then, for a finance lease, measure the net investment at the implicit rate, any selling profit of a manufacturer or dealer and the finance income for the period; for an operating lease, calculate the straight-line income. Record the corresponding entries.

Questions of the file covered by this workpaper

  • How do you classify the corner and Galerie Nord subleases?
  • Calculate the 20X5 income of the corner sublease.
  • Which entries do you record for 20X5?

Documents in the file

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