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IFRS 9Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 9L4 · Expert

Documents

Group profile and file conventions

Memo

Group profile and file conventions

Vestrel Industries SA (fictitious entity), an industrial group, closes its consolidated accounts on 31 December 20X6. File conventions: amounts in EUR; the losses of each scenario are given discounted; the original effective interest rate and the credit-adjusted rate are data; the recalculated gross carrying amount of a modified asset is the present value of the modified cash flows at the original effective interest rate (the file's recalculation method); file convention (pedagogical assumption, not imposed by IFRS 9): the expected loss of the credit line is computed as exposure × probability of default × loss given default, without discounting; differences are expressed as percentages; the entries are illustrative.

Classification decision for a financial asset: business model, contractual cash flow test, fair value option, equity election and initial measurement: Alvane senior tranche

File of an industrial group: hybrid contracts and separation, modification of an asset, assets credit-impaired from origination, loan commitments and maximum exposure period

8 documents8 sections to document
0 / 5 sections completed
Guided mode

Section 1 of 8

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 9 workpaper
Level
Expert
Estimated time
≈ 60 min
Progress
0 / 4 steps done (review excluded)

Context

Vestrel Industries SA (fictitious entity), an industrial group, closes its consolidated accounts on 31 December 20X6. Its central treasury holds a securitisation tranche and several loans, the group issued a bond indexed to copper, renegotiated a loan, acquired an already credit-impaired receivable and granted a revolving credit facility to its distributors. You prepare the analyses, calculations and entries of the file.

Assignment

Classification decision for the investments and initial amount of the tranche

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

  • Classify the treasury investment portfolio and the Alvane senior tranche: business model, contractually linked instruments and cash flow test.
  • Assess the contractual cash flows of the non-recourse Solaris loan, of the Midane bond (prepayment feature) and of the Dorvan loan, then retain their category.
  • Compute the initial amount of the Alvane tranche.

Documents in the file

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