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Running Head: SEGMENT REPORTING

This document discusses segment reporting requirements for companies. It notes that businesses must report operating and reportable segments according to accounting standards. Operating segments are divisions engaged in business activities, while reportable segments meet size thresholds. The document analyzes segment reporting for two sample companies, noting differences in their reporting approaches. Finally, it states that both Australia and Hong Kong require public companies to report segments per IFRS 8, with no differences between the two standards.

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Rajshekhar Bose
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762 views

Running Head: SEGMENT REPORTING

This document discusses segment reporting requirements for companies. It notes that businesses must report operating and reportable segments according to accounting standards. Operating segments are divisions engaged in business activities, while reportable segments meet size thresholds. The document analyzes segment reporting for two sample companies, noting differences in their reporting approaches. Finally, it states that both Australia and Hong Kong require public companies to report segments per IFRS 8, with no differences between the two standards.

Uploaded by

Rajshekhar Bose
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Running head: SEGMENT REPORTING

SEGMENT REPORTING

Name of the Student

Name of the University

Author Note
Table of Contents
1 question
SEGMENT a-..................................................................................................................................2
REPORTING

Question b..................................................................................................................................3

question c-..................................................................................................................................4

References..................................................................................................................................5
question a-

The segments in a business can be divided into two parts and these are known as

business segment and geographical segment. According the accounting standards, a business

entity requires to report the segments. The annual report of the business organizations show

these segments separately (Bugeja, Czernkowski & Moran, 2015). However, there are

differences between operating segment and reportable segment in AASB8 and HKFRS8.

These differences can be summed as-

Operating Segment

The operating segment of a business entity has been termed as that segment of the

entity which is indulged with other segments of that same entity. The responsibility of the

operations manager is to supervise the financial outcomes of the operating segment (Farías &
2 SEGMENT REPORTING
Rodríguez, (2015).

Reportable Segment

The reportable segments fall under the category of operating segments but these

segments are reported separately by the entity. There are prescribed threshold as per the

AASB8 and HKFRS8 and the operating segments which fall under this threshold are

considered reportable (Lessambo, 2018).

The business entities normally classify their business based on the segments. The

purpose of doing this is to have a clear understanding about the nature of the component of

the enterprise. Since, there are certain components of the business which are classified as

geographically, whereas, other components are classified under the nature of the product and
services. Therefore, the management is able to make a comparison of the companies which

are operating in similar types of segments (Bugeja, Czernkowski & Moran, 2015).

Question b

i) The number and nature of operating segment reported

Both the companies have two operating segment report one is the segementation of

the revenue and the other is the geographical segmentation.

The consolidation of the segment reporting is required to rerlect the finacila

position and perfiormance of the operating activity of the organisations

High fashion industries limited used to reconcile the columns like sales within

the segment and purchase made within the orgainsations.


3 SEGMENT REPORTING
Atlas pearls on the other hand as an Australian company does not follow IFRS

and make overall recocilation of the income statement and the balance sheet and not

on segment basis.

High fashion indiustries limited used to disclose the following on segement to

segment basis

Revenue from external customers

Rewvenue from transactions with the different operating segments

Interest expenses

Depreciation and amortisation

Entity’s interest in profit and loss


Material items of income and expenses

question c-

The segment reporting in Australia is required by those entities whose equity

instruments or debt are traded in the public market and Atlas Pearls is one of the instances.

During the year 2006, the IASB issued Operating Segments under IFRS 8. It is a convergence

standard with FAS 131. According to IFRS 8 the operating segment has been identified on

the basis of the internal reports and those internal reports are viewed regularly by the chief

operating decision maker. The purpose of segment reporting under IFRS 8 is to showcase the

segment of the entity through the views of the management (Pwc.com., 2020).

Similarly the segment reporting in Hong Kong is required by those entities whose

equity instruments or debt are traded in the public market and Hong Kong Corporation High
4 SEGMENT REPORTING
Fashion Intl Ltd is one of the instances. During the year 2006, the IASB issued Operating

Segments under IFRS 8. It is a convergence standard with FAS 131. The chief operating

decision maker is in charge of segment reporting in order to allocate the resources in the

segment and assess the performance of the business entity and it is identified on the basis of

the internal reports and those internal reports. Moreover, there have been amendments for

measurement and disclosure requirement also and the purpose of segment reporting under

IFRS 8 is to showcase the segment of the entity through the views of the management and

there is no differences between HKFRS 8 and IFRS 8 (Pwc.com., 2020).


References

Pwc.com. (2020). Retrieved 5 April 2020, from https://www.pwc.com/gx/en/asset-

management/assets/ifrs-gaap-2009.pdf

Farías, P., & Rodríguez, R. (2015). Segment disclosures under IFRS 8’s management

approach: has segment reporting improved?. Spanish Journal of Finance and

Accounting/Revista Espanola de Financiacion y Contabilidad, 44(2), 117-133.

Lessambo, F. I. (2018). Segment and Intermediary Financial Statements. In Financial

Statements (pp. 277-297). Palgrave Macmillan, Cham.

Bugeja, M., Czernkowski, R., & Moran, D. (2015). The impact of the management approach
5 SEGMENT REPORTING
on segment reporting. Journal of Business Finance & Accounting, 42(3-4), 310-366.

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