IFRS 8 Operating Segments

Question 1

Discuss the need for information on segmental reporting

Answer 1

Large entities produce a wide range of products and services, often in several countries
Further information on how the overall results of entities and made up from each of these products or geographical areas will help the users of the financial statements

Question 2

Operating segment

Answer 2

defined as a component of an entity that engages in business activities from which it earns revenue and incurs expenses. Whose operating results are regularly reviewed by the CODM to make decisions about resource allocation and for which discrete financial information is available.

Question 3

Reportable segment

Answer 3

must have met the definition of an operating segment as has 10% or more of total revenue, profit or loss or assets

Question 4

Identify an entity’s reportable segments

Answer 4

Must meet the definition of an operating segment and have a total of 10% or more of total revenue, reported profit or loss, or assets
Managers may report on other operating segments if they feel the information would be useful to the users

Question 5

Discuss the disclosures required by IFRS 8

Answer 5

General - factors used to identify reportable segments
Further information to allow users to understand how information has been compiled
Reporting segments - total assets and liabilities regularly disclosed
Reconciliations - total entity to total segmental of the following revenue, profit or loss, assets and liabilities
Entity-wide information - products and services, geographical areas, major customers (if any customers represents 10% or more of total revenue)