IFRS 5 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
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Disposal group file: loss, allocation, liabilities and presentation: Reversal at 30 June 20X7
File of a disposal project: classification, measurement of a group, discontinued operation and presentation
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 5 workpaper
- Level
- Expert
- Estimated time
- ≈ 65 min
- Progress
- 0 / 5 steps done (review excluded)
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 A filling line Y, classified as held for sale last year, is withdrawn from the plan.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
Disposal group file
Purpose of the workpaper
For each group, list the assets remeasured under their own standard before classification and the liabilities, identify the assets within the measurement scope of the standard (any goodwill is entered separately) and enter the fair value of the group less costs to sell (datum of the file). The file computes the carrying amount of the group, the loss, its allocation (one instance per target asset) and the reversal capped at the cumulative loss on the assets other than goodwill (the goodwill loss is never reversed). Assets outside the measurement scope and liabilities are not reduced by the loss; liabilities are presented separately, without offsetting against the assets, and interest continues to be recognised. Then prepare the entries.
Questions of the file covered by this workpaper
- Compute total assets and the carrying amount of the group.
- Which items of the group are excluded from the allocation (IAS 40, IFRS 9) and which order applies (IAS 36)?
- Compute the loss of the group and allocate it.
- Compute the reversal at 30 June 20X7 (file convention: no gain is allocated to goodwill).
- Record the 20X6 transactions.
- Record the 20X7 reversal.
Documents in the file
Open the documents to pick out the relevant information.