1. Homage Company is a diversified company operating in seven industries. The id
ID: 2571394 • Letter: 1
Question
1. Homage Company is a diversified company operating in seven industries. The identifiable net assets of the seven segments are detailed below
$250
A. Based on the identifiable assets test, determine which industry segments are reportable under IFRS 8.
B. Explain the importance of reporting activities by segments.
2. What is a reportable segment in accordance with IFRS 8? What criteria are used in determining what operating segment is reportable?
3. How are the segments that are nor reportable segments handled in the required disclosure?
Segment # Segment Segment Identifiable Assets (In Millions) 1 Consumer Goods $500 2 Pharmaceuticals $550 3 Medical and Dianostics$250
4 Wine and Spirit $400 5 Perfumes and Cosmetices $200 6 Watches and Jewelery $150 7 Fashion and Leather Goods $475Explanation / Answer
1a. Ans.
IFRS 8 (International Financial Reporting Standard): - It requires particular classes of entities (essentially those with publicly traded securities) to disclose information about their operating segments, products and services, the geographical areas in which they operate, and their major customers.
Medical and diagnostics and pharmaceuticls will not come under IFRS, Foreign medicaines can not be sold in india.It should be approved by DCGI (Indian regulatory authority)
1b. Ans.
The segments which are not reportable shall be combines and disclosed in an all other segments.
2Ans
A reportable segment is a phrase that relates to international accounting procedures. An exploitablesegment is a portion of a business that generates its own revenues and expenses and has its own assets and liabilities. The following five criteria are used in determining what operating segment is reportable.
1. Nature of products and services
2. Nature of the production process
3. Customer type or class
4. Distribution methods
5. Nature of regulatory environment
3Ans:
non reportabl segments handled in a way that develop a cost which would be expensive and that fact should be disclosed.
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