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WorkpaperIFRS 18 — Presentation and Disclosure in Financial StatementsL2 · L3 · L4

Transition to IFRS 18: restated comparative, reconciliation, note on expenses by nature, "other" label and starting point of the cash flow statement

7 missions10 sections to document90 min
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AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

Take the comparative income statement presented under IAS 1 and the classification retained under IFRS 18. Restate the comparative period, measure the difference in each subtotal, prepare the reclassification entry between categories and the reconciliation. Then prepare the note on expenses by nature when operating expenses are classified by function, judge the aggregation and the "other" label, and compute the operating cash flow from operating profit. The amounts are case data; the content of IAS 7, IAS 8 and IAS 33 is not duplicated.

10 sections · 24 blocks · 3 calculations · 1 entry

  • IFRS 18 §83

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

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File and entity
Specified main business activity, aggregation, the "other" label and expenses by nature of a manufacturer that finances its customers
Case tasks documented here
  • Can the "other operating expenses" keep the "other" label?
  • Compute the total of employee benefits to disclose in the note.
  • Compute the total depreciation of property, plant and equipment to disclose in the note.
1

Facts and data

Inputs

  • Comparative: income statement under IAS 1, classification retained under IFRS 18, items moved between categories

    TextRequired

    OPERATING_EXPENSES_ARE_PRESENTED_BY_FUNCTION_SO_A_NOTE_BY_NATURE_IS_REQUIRED

  • Items to aggregate or disaggregate: common characteristics, "other" label, expenses by function

    Text

  • Subtotal restated under IFRS 18

    Number

  • Subtotal presented under IAS 1

    Number

  • Amount recognised in operating expenses

    Number

    6,300,000

  • Amount included in the carrying amount of an asset

    Number

    450,000

  • Total of the nature of expense per an independent source (payroll, fixed asset register)

    Number

    6,750,000

  • Operating profit (starting point)

    Number

  • Non-cash adjustments

    Number

  • Decrease in working capital

    Number

  • Increase in working capital

    Number

  • Expense reclassified from the operating category to financing

    Number

2

Supporting documents

Evidence

  • Documents obtained and referenced (IAS 1 statements of the comparative period, trial balance by nature, cash flow statement)

    EvidenceRequired

3

Analysis of the transition and the aggregation

Analysis

IFRS 18IFRS 18 §83IFRS 18IFRS 18

  • Points examined: transition and aggregation

    ChecklistRequired

    • Retrospective application: comparative information restated under IFRS 18
    • Profit for the period does not change merely because of the reclassification between categories
    • Difference of each subtotal measured between the restated and the presented comparative
    • Line-by-line reconciliation of the immediately preceding comparative with the amounts presented under IAS 1
    • Single note by nature when operating expenses are by function: depreciation and amortisation, employee benefits, impairment, inventory write-downs
    • "Other" label used only if no more specific label is available
    • Starting point of the operating cash flow (indirect method): operating profit
4

Calculations

Calculations

IFRS 18IFRS 18 §83

  • Transition difference (restated subtotal − subtotal presented under IAS 1)

    Calculation

    0

    Subtotal restated under IFRS 18 ; − Subtotal presented under IAS 1

  • Total of an expense by nature to disclose (recognised in expenses + included in an asset)

    Calculation

    6,750,000

    Amount recognised in operating expenses ; Amount included in the carrying amount of an asset

  • Operating cash flow (operating profit + non-cash adjustments ± change in working capital)

    Calculation

    0

    Operating profit (starting point) ; Non-cash adjustments ; Decrease in working capital ; − Increase in working capital

5

Illustrative entries

Entries

  • Reclassification entry between categories

    Entry

    Debit Expenses of the financing category ← Expense reclassified from the operating category to financing ; Credit Expenses of the operating category ← Expense reclassified from the operating category to financing

6

Judgment: aggregation, disaggregation and the "other" label

Judgment

IFRS 18

  • Aggregation or disaggregation of the items

    JudgmentRequired

    Not applicable

    Items with common characteristics aggregated / Items without common characteristics disaggregated / "Other" label only if no more specific label exists / Not applicable

    Professional judgment: no numerical threshold is set; aggregation must not obscure material information.

  • Rationale: common characteristics, effect on material information, detail available

    Text

7

Items to document for the notes

Disclosure

IFRS 18 §83

  • Information to prepare for the notes

    Checklist

    • Note on expenses by nature, amounts included in assets taken into account
    • Reconciliation of the restated comparative
    • Breakdown of the items labelled "other"
8

Effect on the financial statements

FS impact

  • Effect derived from the entries

    Table

9

Conclusion

Conclusion

  • Restated comparative, difference of each subtotal, note on expenses by nature, aggregation and "other" label, starting point of the cash flow statement and reclassification between categories

    ConclusionRequired

10

Normative references

References

  • Normative references cited in this workpaper

    References

11

Checks and financial statement impact

  • Comparative describedPass
  • Aggregation judged and supportedPass
  • Reclassification entry balancedNot evaluated
  • Recomputed total of the nature of expense = total per the independent sourcePass
Assets
0
Liabilities
0
Profit or loss
0
OCI
0
Equity
0