IFRS 5 · Case studies (Step 3 of 5)
Practical case
Garvane Industries SA, a fictitious industrial company, IFRS financial statements, year end 31 December, amounts in euros. It decides to sell a plant, scrap a line and dispose of a division (case data).
L1 · Guided · Year N
Progressive case in four levels: (1) identify what is classified as for sale, (2) measure and record a plant, (3) deal with a group and a discontinued operation, (4) change of plan, adjustments, disclosures and boundaries. Amounts and periods are case data or assumptions; conventions are flagged as such.
Garvane Industries SA closes its accounts at 31 December N. Several assets and a division are the subject of management decisions. Before any calculation, we must decide what is classified as held for sale and what is a discontinued operation. Applicable standard: IFRS 5.
Fundamental level: the method, help and references are shown.
Method
File checklist
2 / 6 stages reached
Context · Dated fact of the file
Garvane Industries SA, a fictitious industrial company, IFRS financial statements, year end 31 December, amounts in euros. It decides to sell a plant, scrap a line and dispose of a division (case data).
Initial event · L1·Year N · Current stage
Garvane Industries SA closes its accounts at 31 December N. Several assets and a division are the subject of management decisions. Before any calculation, we must decide what is classified as held for sale and what is a discontinued operation. Applicable standard: IFRS 5.
Pieces added
New information · L2·Year N · Upcoming: unlocks after the current stage
New information · L3·Year N · Upcoming: unlocks after the current stage
New period · L4·Year N+1 · Upcoming: unlocks after the current stage
Conclusion · Upcoming: unlocks after the current stage
1 document to work from at this level.
Document 1Supporting document
Garvane Industries SA, a fictitious industrial company, IFRS financial statements, year end 31 December N, amounts in euros.
| Item | Facts |
|---|---|
| A. Lorvane plant | Sale plan approved by the board in September N, agent appointed, advertisement published at a price consistent with fair value, plant vacant; the sale is expected within a year. |
| B. Press line | Scrapping decided for the end of N+1, with no plan to sell; the line is used until then. |
| C. Warehouse | The board approves the disposal plan on 20 January N+1, before the accounts are finalised; no step taken before that date. |
| D. Packaging division | Own markets, customers, management and accounts; classified as held for sale in October N, plan committed and buyer sought. |
First level: all the data is in the brief and the pieces of this level.
4 parts to answer, marked when you submit the level.
Find the useful facts in the pieces before concluding.
Part 1 · Classification · Recognition
Classify each item at 31 December N.
Drag each item into its category, or tap the category under the item.
A. Lorvane plant
B. Press line to be scrapped
C. Warehouse (plan approved on 20 January N+1)
D. Packaging division
3 more questions will appear once the current question is complete.
Your working draft for this file: points noted, leads, intermediate calculations.
Saved on this device only; never graded.
Answer every part to submit the level and see the conclusion.
Normative references