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IFRS 3Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 3L4 · Expert

Documents

Group profile and case conventions

Memo

Group profile and case conventions

Sorvane Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. Case conventions: amounts in EUR; fair values, discount rates, percentages and allocation keys are case data; case convention (pedagogical assumption, not attributed to IFRS 3): Tarvel is a business, Sorvane is its acquirer and the acquisition date is 1 October 20X6, as established by the identification analysis; for Tarvel, the non-controlling interest, made up of ordinary shares only, is measured at the proportionate share of the identifiable net assets; deferred tax effects are set aside; the expense of the replacement award is spread on a straight-line basis; the entries are illustrative: the combination entry records the assets and liabilities assumed excluding leases, and the lease entry records the lease liability and the right-of-use asset, the difference against market terms being charged to goodwill.

Step acquisition: remeasurement of the previously held interest, other comprehensive income reclassified, goodwill, pre-existing relationship, remuneration and separate transactions

File of an acquiring group: complex allocation (leases, reacquired rights, replacement awards, employee benefits, liabilities within IAS 37), reverse acquisition in outline, allocation of goodwill and disclosures

10 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

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
Expert
Estimated time
≈ 75 min
Progress
0 / 5 steps done (review excluded)

Context

Sorvane Group SA (fictitious entity) takes control of Tarvel Technologies SA in 20X6 by increasing its interest from 20 % to 70 %. The consolidation file must deal with the measurement exceptions (lease, reacquired right, replacement award, retirement plan, litigation, insurance contracts), the previous interest, the items outside the exchange, the goodwill, its allocation to cash-generating units, a reverse acquisition and the disclosures.

Assignment

Previous interest, separate transactions and consideration of the reverse acquisition

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

  • Pelgrane and Dorvane transaction: who is the accounting acquirer? Compute the share of the voting rights of the owners of Dorvane, the number of shares Dorvane would have had to issue and the consideration.
  • Compute the remeasurement gain on the 20 % interest held before.
  • Are the retention bonus of EUR 200,000 and the pre-existing receivable of EUR 80,000 part of the exchange?
  • Record the remeasurement of the 20 % interest.

Documents in the file

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