IFRS 3 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Purchase price allocation: consideration transferred, fair values, deferred tax, non-controlling interest (two methods), goodwill or gain on a bargain purchase and allocation of goodwill: Lunel — preliminary valuation
Step acquisition: remeasurement of the previous interest, reclassification of other comprehensive income, goodwill, pre-existing relationship and remuneration for future services
Section 1 of 9
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
- ≈ 90 min
- Progress
- 0 / 5 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
Purchase price allocation of Mirel and reassessment of Lunel
Purpose of the workpaper
List the consideration transferred, the fair values of the identifiable assets and liabilities assumed, the deferred tax on the fair value uplift, the non-controlling interest under both methods and the previously held interest; compute the goodwill or the excess to reassess, record the combination and allocate the goodwill to the cash-generating units. Fair values, rates, percentages and allocation keys are case data; the method chosen for the non-controlling interest is a choice of the acquirer, never imposed by the standard.
Questions of the file covered by this workpaper
- Compute the non-controlling interest of Mirel at the proportionate share of the identifiable net assets.
- Which method did Halvane choose for the non-controlling interest and is that choice imposed?
- 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.
- Compute the part of the goodwill of Mirel attributable to the non-controlling interest.
- Lunel: what had Halvane to do before recognising a gain, and what is the conclusion after reassessment?
- Record the obtaining of control of Mirel with the goodwill.
Documents in the file
Open the documents to pick out the relevant information.