Skip to main content
IFRS Academy

CERTYNEX IFRS ACADEMY

My account — Professional

Search the Academy

Home
My learning path
Exercises & quizzes
Cases
Workpapers
Exams
My progress

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

Brenvane Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. File conventions: amounts in EUR, interest and present values rounded to the cent (half up); the effective interest rates are given; loss rates, probabilities and percentages are file data and not rules; file conventions (pedagogical assumptions, not imposed by IFRS 9): the expected loss of loan M is computed as exposure × probability of default × loss given default, without discounting, and the €2,000 commissions on the convertible bond measured at fair value through profit or loss are recognised as expenses; differences are expressed as percentages; the entries are illustrative.

Derecognition and modification: decision tree for a transferred asset, extinguishment of a liability and the 10 % test on a modification: Transfer of loans to the fund

File of a group: classification, measurement, impairment and derecognition of financial instruments (IFRS 9)

10 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 9 workpaper
Level
Expert
Estimated time
≈ 75 min
Progress
0 / 3 steps done (review excluded)

Context

Brenvane Group SA (fictitious entity) closes its consolidated accounts on 31 December 20X6. In 20X6 it acquired a convertible bond, granted a loan with an arrangement fee, acquired a zero-coupon bond at FVOCI, recorded the deterioration of a loan, sold loans to a fund with restrictions and renegotiated a bank loan. The preparer builds the file on financial instruments, submitted to a reviewer. 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

Sale to the fund and the 10 % test on loan R

Purpose of the workpaper

Describe the transfer or renegotiation, walk through the decision tree (expiry of the rights, transfer, risks and rewards, control), document the judgments, compute the derecognition gain or loss and, for a modified liability, the 10 % test (present values at the original effective interest rate, net fees included), then prepare the entries. The assessment of "substantially all" and of control remains a judgment with no numerical threshold; present values are case calculations.

Questions of the file covered by this workpaper

  • Follow the decision tree for the sale of loans to the fund (risks and rewards, control) and conclude.
  • Compute the present values of the original cash flow and of the modified cash flow of loan R at the original effective interest rate.
  • Compute the difference in present values, net fee included.
  • Compute the 10 % threshold of the original present value.
  • Compute the relative difference as a percentage of the original present value.
  • Is the modification of loan R substantial according to the quantitative test? What remains for judgment?

Documents in the file

Open the documents to pick out the relevant information.

Choose how you want to work
View the workpaper template