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IFRS 5Workpapers (Step 4 of 5)

Workpaper assignment

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

Documents

Register of the five situations

Schedule

Register of the five situations

Register of situations at 31 December 20X5. Situation 1: a hydraulic press, unused since October and in working order. The board of directors decided on the sale on 15 November 20X5, a broker is mandated and the advertisement has been published since December; two potential buyers have visited the site. The asking price is 285,000 EUR against an independent appraisal value of 280,000 EUR (costs to sell negligible); the sale is expected within 6 months, with no unusual condition. Situation 2: a warehouse in Lyon, used every day for storage; management 'thinks it will sell it one day' but has taken no decision and started no action. Situation 3: a fleet of trucks whose sale is decided, but which remains in use for deliveries until replacement trucks arrive, expected in 18 months; the buyers would take delivery after that date. Situation 4: an assembly line offered since September at 900,000 EUR while the independent appraisal values it at 600,000 EUR; no offer has been received and management refuses to lower the price. Situation 5: a workshop in Rouen whose sale is decided, but the contract concluded with the buyer takes effect only at the end of the current operating lease, in 30 months.

Held-for-sale classification criteria file: Lyon warehouse

Five assets: held for sale or not, and the end of depreciation

3 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 5 workpaper
Level
Foundation
Estimated time
≈ 55 min
Progress
0 / 3 steps done (review excluded)

Context

Verdalis SA (fictitious entity, mechanical engineering) closes its books on 31 December 20X5. The finance department must decide which of five assets, whose sale is being discussed internally, are presented as held for sale. It must also stop depreciating the asset that meets the criteria.

Assignment

Classification criteria file

Purpose of the workpaper

For each asset or group (one instance per asset), describe its condition and current use, gather the evidence of the plan (decision, marketing effort, offers, timetable), enter the asking price and the reference fair value, then justify each judgement: sale highly probable, availability for immediate sale, one-year period and any delay beyond the entity's control, sale or abandonment, plan maintained or changed. The standard sets no threshold: a 'reasonable' price and a 'highly probable' sale are matters of judgement documented by the facts. Then prepare the reclassification entry.

Questions of the file covered by this workpaper

  • Is the hydraulic press available for immediate sale and is the sale highly probable? Justify.
  • Record the reclassification of the press.

Documents in the file

Open the documents to pick out the relevant information.

Choose how you want to work
View the workpaper template