Held-for-sale classification criteria file: Filling line Y

Context

Groupe Valérian (fictitious entity, water and beverages) prepares its consolidated IFRS financial statements at 31 December 20X6. The board has committed to a plan to dispose of its Water division, which includes goodwill, tangible and intangible assets, an investment property at fair value, receivables and payables. A filling line Y, classified as held for sale last year, is withdrawn from the plan. You prepare the file: classification, measurement, allocation of the loss, ceasing the classification of Y, discontinued operation, the 20X7 reversal and presentation. Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.

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 sale of the division highly probable and is the division available? Justify.
• Is the sale expected within one year? Justify.
• Record the 20X6 transactions.

• MinutesMinutes of the boardOpen
• ScheduleCarrying amounts of the divisionOpen
• ExtractExpert's reportsOpen
• ScheduleIncome statement of the divisionOpen
• ScheduleRecord of filling line YOpen
• MemoLetter from the potential buyerOpen
• MemoTraining budgetOpen