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IFRS 3Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 3L1 · Fundamental

Documents

Group profile and case conventions

Memo

Group profile and case conventions

Valmora Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. Case conventions: amounts in EUR; fair values are those of independent valuations (case data); case convention (pedagogical assumption, not attributed to IFRS 3): for transaction A, Valmora elects to apply the optional concentration test; for transaction B, it does not apply it and analyses the inputs and processes directly; the entry requested is illustrative and the price paid is its cost, the accounting for the assets falling under the standards that apply to them.

Identifying a business combination: scope of the standard, business or group of assets, common control, acquirer and acquisition date: Transaction C — sister company

Acquisition of an activity: business or group of assets? Scope exclusions, inputs and processes, concentration test, acquirer and acquisition date

5 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 3 workpaper
Level
Foundation
Estimated time
≈ 60 min
Progress
0 / 3 steps done (review excluded)

Context

Valmora Group SA (fictitious entity) carried out three transactions in 20X6: the purchase of a let office building, the acquisition of the shares of an operating bakery and the purchase of the shares of a sister company. You prepare the scoping note of the consolidation department: which transactions fall under IFRS 3, who is the acquirer and on what date?

Assignment

Identification of the business, the acquirer and the acquisition date

Purpose of the workpaper

Describe the transaction and the items acquired, check the exclusions from the scope, assess the inputs and processes (and, if the acquirer so elects, the concentration test), identify the acquirer and the date on which control is obtained, then support each judgment. Amounts, percentages and dates are case data: no threshold is presented as imposed by the standard.

Questions of the file covered by this workpaper

  • Do the three transactions A, B and C fall within the scope of IFRS 3? Rule out those that are excluded and justify.
  • Transaction A: compute the fair value of the gross assets acquired, apply the optional concentration test and conclude: business or acquisition of assets?
  • Transaction B: is the set acquired a business? Identify the inputs and processes and assess the accounting and payroll contract.
  • Transaction C: does common control place the transaction outside the scope?
  • Transaction B: identify the acquirer and justify.
  • Transaction B: determine the acquisition date taking the agreements and the facts into account.

Documents in the file

Open the documents to pick out the relevant information.

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View the workpaper template