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FSA Chapter 5
The document discusses interim and segment reporting requirements. It notes that interim reports can provide timely financial information to users. Segment disclosures describe a company's activities in different industries and geographical areas given growing diversification. There are two views on recognizing expenses and revenues in interim reports. IAS 34 allows condensed or complete interim financial statements but does not mandate frequency or timing of reports. IFRS 8 defines operating and reportable segments and disclosure requirements regarding identified segments and their products/services.
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FSA Chapter 5
- 1. Financial Statement AnalysisChapter 5 Interim and segment reporting Bonsón, E., Cortijo, V., Flores, F.  Content on this file is licensed under a Creative Commons Attribution Non-Commercial No Derivatives Works 3.0
- 2. Index Introduction Interimreporting Segment disclosures
- 3. Index Introduction Interimreporting Segment disclosures
- 4. Introduction Timeliness isespecially relevant in the current continuously changing environment. Users need more timely information in order to make informed decisions. Interim reports can provide this kind of significant information Another kind of information which is extremely valuable is the company's activities in different industries or different geographical areas, due to the growing diversification and internationalization of firms, that is described by means of the segment disclosures
- 5. Index Introduction Interimreporting Segment disclosures
- 6. Interim reporting interimfinancial reports cover periods shorter than a full fiscal year there are two alternative philosophies of interim reporting Integral view ârecognize estimated expenses and expected revenues in proportion to forecasted annual activity level Discrete view ârecognize expenses and expected revenues in the interim period in which they are incurred IASB acknowledges that it is better . It is better to adopt a mixed approach based on the nature of the expense or revenue
- 7. Interim reporting IAS34 does not prescribe which entities should publish interim financial reports, how frequently, or how soon after the end of an interim period. These decisions must be made by local regulators. IAS 34 allows companies to disclose a complete or condensed set of financial statements
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- 10. Comparative periods tobe provided
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- 12. Index Introduction Interimreporting Segment disclosures
- 13. Segment disclosures segmentreporting is fully explained in IFRS 8 (Operating Segments) companies are required to explain the factors that were used to identify the reportable segments as well as the products and services provided by each
- 14. Segment disclosures IFRS8 distinguishes between operating and reportable segments: Operating segment, if it ⌠is a component of an entity's activity has earnings and incur expenses , and also performs transactions with other segments is reviewed by the operating management to take decisions generates discrete financial information available
- 15. Segment disclosures Reportable segment is an operating segment for which one of this thresholds is met: the segment's reported revenue (including both sales to external customers and inter-segment sales or transfers) is 10% or more of the combined revenue , internal and external, of all operating segments. the absolute amount of its reported profit or loss is 10% or more of the greater, in absolute amount, of : the combined reported profit of all operating segments that did not report a loss and the combined reported loss of all operating segments that reported a loss. its assets are 10% or more of the combined assets of all operating segments
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