Context · Dated fact of the file
Brevane: from the acquisition of Calmora to the takeover of Dorlane
Brevane SA, a fictitious industrial group, consolidated IFRS financial statements, year-end 31 December.
IFRS 3 · Case studies (Step 3 of 5)
Practical case
- Course
- Exercises
- Case studies
- Workpapers
- Exams
File · Progressive casePath L1 → L4L1 · Fundamental
Brevane: from the acquisition of Calmora to the takeover of Dorlane
Brevane SA, a fictitious industrial group, consolidated IFRS financial statements, year-end 31 December.
1 document6 tasks
- Period
- 1 October N
- Standards
- IFRS 3 — Business Combinations
- Levels
- 0 / 4 levels validated
- Current level
- L1 · Guided≈ 110 min
Assistance levelFull guidance · strong assistance
- Method: shown
- Checklist: shown
- Hints: shown
- Step-by-step work: shown
Case brief
L1 · Guided · 1 October N
Level 1: characterising the transaction and calculating goodwill
Progressive case in four levels around Brevane's business combinations: (1) characterisation, acquisition date, goodwill at the proportionate share and entries; (2) deferred tax, contingent consideration and the fair value method; (3) measurement period and remeasurement of contingent consideration; (4) step acquisition, separate transactions and error correction. Fair values, rates, probabilities and method choices are case data; rounding follows a case convention, not a rule of the standard.
Brevane SA acquires 80% of Calmora SA. You characterise the transaction, fix the acquisition date, calculate goodwill at the proportionate share and post the entries. The standards involved are announced.
Fundamental level: the method, help and references are shown.
Method
- 1Read the brief and the assignment.
- 2Open each document and spot the relevant data.
- 3Carry out the work in the suggested order.
- 4Submit, then read the conclusion and the model answer.
File checklist
- Open each piece (0 / 1 consulted) · to do
- Answer the questions of the level (0 / 6) · to do
- Validate the level, then read the conclusion · to do
Events
The file, period by period
2 / 6 stages reached
Initial event · L1·1 October N · Current stage
Level 1: characterising the transaction and calculating goodwill
Brevane SA acquires 80% of Calmora SA. You characterise the transaction, fix the acquisition date, calculate goodwill at the proportionate share and post the entries. The standards involved are announced.
Pieces added
- Calmora transaction sheet
New period · L2·31 December N · Upcoming: unlocks after the current stage
Upcoming stage
New period · L3·Year N+1 · Upcoming: unlocks after the current stage
Upcoming stage
New period · L4·N+1 and N+2 · Upcoming: unlocks after the current stage
Upcoming stage
Conclusion · Upcoming: unlocks after the current stage
Upcoming stage
Documents
Case documents
1 document to work from at this level.
Document 1Document
Calmora transaction sheet
Brevane SA, a fictitious industrial group, is studying the acquisition of Calmora SA, a furniture manufacturer: factory, 140 employees, manufacturing methods, brands and customers. The facts are pedagogical assumptions.
| Item | Data |
|---|---|
| Signing of the agreement | 15 September N |
| Brevane takes over management and pays | 1 October N (no other written agreement defers control) |
| Share acquired | 80% of the capital, i.e. control |
| Price paid in cash | €1,040,000 |
| Legal and advisory fees | €22,000 |
| Method of measuring the non-controlling interest (level 1) | Proportionate share of identifiable net assets (the case's choice) |
Fair values at the acquisition date (case data):
| Item | Fair value |
|---|---|
| Property, plant and equipment | 870,000 |
| Inventories | 225,000 |
| Receivables | 185,000 |
| Customer contracts, not recorded at Calmora | 235,000 |
| Bank loan | 365,000 |
| Trade payables | 145,000 |
Case convention at level 1: deferred tax and contingent consideration are ignored; amounts rounded to the euro.
Data
Facts of the file
- Entity
- Brevane SA, a fictitious industrial group, consolidated IFRS financial statements, year-end 31 December.
- Period
- 1 October N
- Current level
- L1 · Guided
- Standards
- IFRS 3 — Business Combinations
Pieces carried over from earlier levels
First level: all the data is in the brief and the pieces of this level.
Questions
6 parts to answer, marked when you submit the level.
- Information to identify1
- Questions2
- Calculations1
- Journal entries2
Information to identify
Find the useful facts in the pieces before concluding.
Part 1 · Multiple choice · Recognition
How is the transaction on Calmora characterised?
5 more questions will appear once the current question is complete.
Complete the question to continue.
Workspace
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Conclusion
Answer every part to submit the level and see the conclusion.
Normative references
- IFRS 3 §2
- IFRS 3 §B7
- IFRS 3 §6
- IFRS 3 §7
- IFRS 3 §8
- IFRS 3 §9
- IFRS 3 §10
- IFRS 3 §11
- IFRS 3 §19
- IFRS 3 §32
- IFRS 3 §37
- IFRS 3 §40
- IFRS 3 §58
- IFRS 3 §53
- IFRS 3 §50
- IFRS 3 §51
- IFRS 3 §52
- IFRS 3 §B55