IFRS 3 · Workpapers (Step 4 of 5)
Workpaper assignment
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Step acquisition: remeasurement of the previously held interest, other comprehensive income reclassified, goodwill, pre-existing relationship, remuneration and separate transactions: Mirel — retention bonus
Step acquisition: remeasurement of the previous interest, reclassification of other comprehensive income, goodwill, pre-existing relationship and remuneration for future services
Section 1 of 7
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 3 workpaper
- Level
- Advanced
- Estimated time
- ≈ 75 min
- Progress
- 0 / 3 steps done (review excluded)
Context
Halvane Group SA (fictitious entity) held 30 % of the associate Mirel Capteurs SA; it takes control of it in 20X6 by acquiring a further 40 %. You deal with the remeasurement of the previous interest, the items that are not part of the exchange, the goodwill, a second acquisition subject to reassessment and a later purchase from the minority shareholders.
Assignment
Step acquisition of Mirel: previous interest, pre-existing relationship and retention bonus
Purpose of the workpaper
List the previously held interest (carrying amount, fair value, cumulative amounts in other comprehensive income), compute the remeasurement gain and the goodwill, then review the items that are not part of the exchange: settlement of a pre-existing relationship, payments linked to employment. Fair values and the measure of the settlement are case data or case conventions, never rules presented as imposed.
Questions of the file covered by this workpaper
- When and how does Halvane obtain control of Mirel, and what happens to the 30 % interest held before?
- Classify the price of the further 40 %, the pre-existing supply contract and the retention bonus: are they part of the exchange?
- Compute the loss on settlement of the pre-existing supply contract (IFRS 3, para. B52).
- Compute the remeasurement gain on the 30 % interest and then the total gain in profit or loss with the amounts reclassified.
- On what basis should the translation reserve be reclassified to profit or loss?
- Compute the goodwill of Mirel (non-controlling interest at fair value retained, then at proportionate share) and the result of Lunel before and after reassessment.
- How should the acquisition of 10 % from the minority shareholders on 15 December 20X6 be treated?
- Record the remeasurement of the 30 % interest to fair value.
- Record the reclassification of the translation reserve to profit or loss.
- Record the settlement of the pre-existing supply contract.
Documents in the file
Open the documents to pick out the relevant information.