DipIFR Syllabus C. Presentation and additional disclosures - IFRS 8 Segmental Reporting - Introduction - Past Papers ^{1 / 3}

You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The chief executive officer (CEO) of Omega has reviewed the draft consolidated financial statements of the Omega group and of a number of the key subsidiary companies for the year ended 31 March 2018. None of the subsidiaries are listed entities but all prepare their financial statements in accordance with IFRS. The CEO has sent you an email with the following queries:

Query One
I notice that the disclosures relating to operating segments in the consolidated financial statements appear to be based on the geographical location of the customers of the group. I am the non-executive director of another large listed entity and the segment disclosures in their consolidated financial statements are based on the type of products sold. Also some of our larger subsidiaries have customers located in more than one geographical region, yet they provide no segment disclosures whatsoever in their individual financial statements. I would like to see segment disclosures given in the individual subsidiary accounts as well. I really don’t understand these inconsistencies given that all these financial statements have been prepared using IFRS. Please explain the reasons for these apparent inconsistencies. (6 marks)

Required:
Provide answers to the three queries raised by the chief executive officer. Your answers should refer to relevant provisions of International Financial Reporting Standards.

Note: The mark allocation is shown against each of the three issues above.

You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). You have recently produced the final draft of the financial statements for the year ended 30 September 2016 and these are due to be published shortly. The managing director, who is not an accountant, reviewed these financial statements and prepared a list of queries arising out of the review.

Query Four
On reviewing our financial statements, I found a note giving information about the different segments of our business and also the disclosure of the earnings per share of our entity. Neither the segment note nor the earnings per share disclosure appears in the financial statements of entity X (see query 1 above). Even though entity X is unlisted, both entities report under full International Financial Reporting Standards so I do not understand how this difference can occur. Please explain this to me. (3 marks)

Required:
Provide answers to the queries raised by the managing director.

Note: The mark allocation is shown against each of the four queries above.

You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The managing director, who is not an accountant, has recently been appointed. She formerly worked for Rival, one of Omega’s key competitors. She has reviewed the financial statements of Omega for the year ended 30 September 2014 and has prepared a series of queries relating to those statements:

Query One
‘I was very confused by the note that included financial information relating to our operating segments. This note bears very little resemblance to the equivalent note included in the financial statements of Rival. Please explain how the two notes can be so different.’ (8 marks)

Required:
Provide answers to the three queries raised by the managing director. Your answers should refer to relevant provisions of International Financial Reporting Standards

Note: The mark allocation is shown against each of the three issues above.

You are the financial controller of Omega, a listed company which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Your managing director, who is not an accountant, has recently attended a seminar and has prepared a number of questions for you concerning two issues raised at the seminar:

(b) ‘One of the topics discussed at the seminar was segment reporting. I believe I heard someone say that segment reporting varies from company to company depending on its internal structure. Please explain how we should identify the segments we use to provide our segment reporting information. I do not need to know the detailed content of a segment report.’ (10 marks)

Required:
Provide answers to the questions raised by the managing director.

Note: The mark allocation is shown against each of the two issues above.