IFRS 9 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Classification decision for a financial asset: business model, contractual cash flow test, fair value option, equity election and initial measurement
Loan at the effective interest rate and debt securities: amortised cost schedule with integral fees, FVOCI with recycling and reclassification
Section 1 of 8
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 9 workpaper
- Level
- Intermediate
- Estimated time
- ≈ 60 min
- Progress
- 0 / 4 steps done (review excluded)
Context
Lorvane Crédit SA (fictitious entity) closes its books on 31 December. In 20X6 it granted a loan to a company with an arrangement fee, it holds a zero-coupon bond in its liquidity portfolio, it decided to sell a mortgage loan portfolio and it monitors a loan whose borrower is in liquidation. You prepare the calculations and the entries.
Assignment
Classification decision after a change of business model: portfolio M
Purpose of the workpaper
Describe the instrument and its terms, gather the evidence on the business model and the sales history, assess the contractual cash flows (principal and interest), document the fair value option or the equity election where relevant, retain the category, compute the initial amount and prepare the entry and the note. Amounts are case data; the business model and the cash flows are judgments, with no threshold imposed by the standard.
Questions of the file covered by this workpaper
- Is the board decision on portfolio M a change of business model giving rise to reclassification, and at which date?
- Compute the fair value difference of portfolio M at the reclassification date.
- Record the reclassification of portfolio M from amortised cost to fair value through profit or loss.
Documents in the file
Open the documents to pick out the relevant information.