Green Dot, Inc.
Equity Investment @ FVTOCI - Additions
For the period ended December 31, 2016
Objective:
To validate if acquisitions of investments were properly recorded in accordance with IFRS 9 and 13.
Procedures:
1. Obtain schedule of acquisitions
2. Vouch acquisitions to supporting documents
3. Evaluate results and conclude
Substantive testing:
Transaction Date Investment Description Source Document Name Source Document No. Amount per Source Document Amount per Books
[Insert additional rows and columns as necessary]
Issues Noted:
[Document here issues noted, if any]
[No specific format required]
[Insert additional rows and columns as necessary]
Recommendation:
[Document here Auditor's Recommendation, if any]
[No specific format required]
[Insert additional rows and columns as necessary]
Proposed Entries:
[Document here proposed adjustments, if applicable]
Debit Credit
[Account Name]
[Account Name]
[Account Name]
[Account Name]
[Insert additional rows and columns as necessary]
Amount per Audit Difference
Objective:
To verify the existence of the investment balance as at December 31, 2016 and to validate whether the Company has rights over the assets.
Procedures:
1. Calculate the number of shares held as at December 31, 2016.
2. Obtain supporting documents to support the existence of the shares including the Company's rights over them.
3. Evaluate results and conclude.
Substantive testing:
Transaction Date Investment Description Source Document Name Source Document No. Number of units per Source Document Conclusion
1-Jun-16 Equity Investments @ FVTOCI Stock Certificate 10392 1000 shares The Equity investment @ FVTOCI presente
1-Nov-16 Equity Investments @ FVTOCI Stock Certificate 31584 1000 shares The Equity investment @ FVTOCI presente
Issues Noted:
[Document here issues noted, if any]
[No specific format required]
[Insert additional rows and columns as necessary]
Proposed Entries:
[Document here proposed adjustments, if applicable]
Debit Credit
[Account Name]
[Account Name]
[Account Name]
[Account Name]
[Insert additional rows and columns as necessary]
Objective:
To validate if the investment was properly valued in accordance with IFRS 9 and 13
Procedures:
1. Perform independent calculation of the value of investments as at December 31, 2016.
2.
3. Perform
Compareindependent calculation
the calculated of FV gain/loss.
amount against the amount recorded in the Company's book.
4. Evaluate results and conclude.
Independent Calculation:
Balance at Year End after forex and fv
Number of stocks 2,000
Closing Rate 152
FV in US$ 304,000
Forex Rate 50
Balance at Year End ₱ 15,200,000.00
Unrealized Gain/Loss
FV Loss(Gain) US$ Forex Rate
June 1 Acquisition 297,000 47
Nov 1 Acquisition 143,000 48
Unrealized Loss on change in FV
Forex Gain(Loss) Balance at year end after Fv change Change in forex
June 1 Acquisition 152,000 3
Nov 1 Acquisition 152,000 2
Total
Unrealized Loss on change in Fv 6,383,000
Unrealized Loss on Forex 760,000
Unrealized loss- FVTOCI 5,623,000
Comparison of Book value and Audited value
Amount per Book 20,000,000
Less :Amount per Audit 15,200,000
Overstatement 4,800,000
Evaluation
There is a difference in the adjusted ending balance. This may be attributed to multiple reasonsThere was no recorded unrealized lo
[Link] gain on foreign exchange was overstated by 440000.
Issues Noted:
The entry on the check voucher number 11-01 is incorrect because of transposition errors and the non-capitalization of the process
The entry on the check voucher number 06-01 is incorrect because of the non-capitalization of the processing fee.
Green Dot, Inc. had a separate account of processing fee at the year end.
Recommendation:
1. Entity must see to it that capitalizable costs such as processing fee (transaction cost) should be added to the investment accoun
2. Checking of recorded amounts to detect errors such as transposition errors.
3. Recomputation.
4. The processing fee was considered as a capitalizable costs added to the equity investments, therefore there should have no sepa
Proposed Entries:
1. Elimination of Processing Fees.
2. Additional entry for the understatement of equity investments.
Debit
Equity Investment 1,566,000
Cash in Bank
Processing Fee
balancce at acquisition
₱ 13,959,000
₱ 6,864,000
Unrealized Gain on Forex
₱ 456,000.00
₱ 304,000.00
₱ 760,000.00
onsThere was no recorded unrealized loss on change in fair
and the non-capitalization of the processing fee.
n of the processing fee.
ould be added to the investment account
nts, therefore there should have no separate accounts of processing fee recorded at the year end.
Credit
297,000
1,269,000