A quote from a colleague: I never look at the operating segment information in a set of
Question:
A quote from a colleague: ‘I never look at the operating segment information in a set of financial statements when I am making investment decisions – it’s just lots and lots of numbers I won’t understand. It must cost entities a significant amount of money to produce the information, which must outweigh the benefits it provides’.
Required:
(a) Discuss the benefits that could be gained by investors from reviewing the operating segment disclosures when making future decisions on investment.
(b) Discuss the limitations of using operating segment information when making investment decisions.
(c) Discuss how the requirements of IFRS 8 Operating Segments assist entities in minimizing the costs of producing these disclosures.
Step by Step Answer:
a Potential benefits of using Operating segment information i It can give an investor more information about the entity for example it might indicate if one entity within the group is growing faster t...View the full answer
International Financial Reporting And Analysis
ISBN: 9781473766853
8th Edition
Authors: David Alexander, Ann Jorissen, Martin Hoogendoorn
