Operating segments – NBC Institute

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

Question

Jafuwara PLC is a public limited company trading in six business areas, each reported separately in its internal accounts provided to the Chief Operating Decision Maker (CODM). The results of these segments for the year ended December 31, 2021, are as follows:

Operating Segment Information as at Dec. 31, 2021

Required:

Draft a report addressed to the directors of Jafuwara PLC advising them on which of the operating segments constitute a ‘reportable’ operating segment for the year ended December 31, 2021, in accordance with IFRS 8. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: CODM, IFRS 8, Operating segments, Reportable Segments
Level: Level 3

Topic: Segment Reporting (IFRS 8)

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

Question

Fine Face (FF) Limited produces and sells a range of body care products through three separate divisions. Additionally, the company has two laboratories responsible for research and development activities.

First Laboratory:
- Funded internally and centrally for each of the three sales divisions.
- Does not perform research and development activities for external entities.
- Each division is allocated a budget for purchasing research and development services from the laboratory.
- The laboratory is directly accountable to the divisional heads for this expenditure.
Second Laboratory:
- Performs contract investigation activities for other laboratories and body care companies.
- Earns 75% of its revenue from external customers, representing 18% of the organization’s total revenue.
- The head of the second laboratory is directly accountable to the Chief Operating Decision Maker (CODM), and the CODM regularly reviews its performance, operating activities, resource allocation, and financial results.

Fine Face Limited is uncertain whether the two laboratories should be reported as separate segments under IFRS 8 – Operating Segments.

Required:

Advise the directors of Fine Face Limited on this issue. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chief Operating Decision Maker (CODM), IFRS 8, Operating segments, R&D
Level: Level 3

Topic: Segment Reporting (IFRS 8)

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

Question

Puppsy PLC had identified the following segments in its annual financial statements for the year ended September 30, 2020:

i. Segment A
ii. Segment B
iii. Segment C

The company disclosed two reportable segments. Segments A and B were aggregated into a single reportable operating segment. Operating segments A and B have been aggregated on the basis of their similar basic features and the nature of their goods and services. In the local train market, it is the local transport authority which awards the contract and pays Puppsy PLC for its services. In the local train market, contracts are awarded following a competitive tender process, and the ticket prices paid by passengers are set by and paid to the transport authority. In the inter-city train market, ticket prices are set by Puppsy PLC, and the passengers pay Puppsy PLC for the service provided.

Required:
Advise Puppsy PLC on how the above issues should be dealt with in its financial statements for the year ended September 30, 2020.
(10 Marks)

b. Puppsy PLC was given a building by a private person in August 2018. The benefactor of the building included a condition that the building must be brought into use as a train museum in the interests of the local community or the asset (or a sum equivalent to the fair value of the asset) must be returned. The fair value of the asset was N7.5 million in August 2019. Puppsy PLC took over the building in November 2018.

However, the company could not utilize the building in accordance with the condition until August 2019 as the building needed some renovation and adaptation and in order to abide with the condition attached to it. Puppsy PLC spent N2.5 million on renovation and adaptation.

Required:
Advise Puppsy PLC on the appropriate accounting treatment for the building and the costs incurred in preparing it for use in its financial statements for the year ended September 30, 2020.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Conditional Asset Transfer, Contractual Obligations, Fair Value Measurement, Operating segments, Public Sector Contracts, Renovation Costs, Segment Reporting
Level: Level 3

Topic: Segment Reporting (IFRS 8)
Series: NOV 2023

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

Question

IFRS 8: Operating Segments requires particular classes of entities (essentially those with publicly traded securities) to disclose information about their operating segments. Information is based on internal management reports, both in the identification of operating segments and measurement of disclosed segment information. It applies to the separate or individual financial statements of an entity and to the consolidated financial statements of a group.

Required:
Distinguish between operating segments and reportable segments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Reporting, IFRS 8, Operating segments, Reportable Segments
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAR 2024

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

Question

Explain with justification, whether each of the following could most likely be classified as a discontinued operation under IFRS 5: Non-current Assets Held for Sale and Discontinued Operations in this year’s financial statements:
i) A reportable operating segment that met the definition of held for sale after the year-end but before the financial statements were authorised for issue. (1 mark)
ii) A reportable operating segment that was closed down during the financial year. The assets of the segment were broken up and used in other divisions of the company. (2 marks)
iii) A division of a business, classified as held for sale, that was correctly treated as a discontinued operation in last year’s financial statements, but which has not been sold by this year-end due to the sale being referred to the National Insurance Commission, which regulates the insurance industry. The commission is not expected to report its findings until 6 months after this year-end. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Discontinued Operations, Held for Sale, IFRS 5, Non-current Assets, Operating segments
Level: Level 3

Topic: IFRS 5: Non-current assets held for sale and discontinued operations
Series: MAY 2018

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

Question

Operating Segment Information as at Dec. 31, 2021

Required:

Answer

Find Related Questions by Tags, levels, etc.

Tags: CODM, IFRS 8, Operating segments, Reportable Segments
Level: Level 3

Topic: Segment Reporting (IFRS 8)

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

Question

First Laboratory:
- Funded internally and centrally for each of the three sales divisions.
- Does not perform research and development activities for external entities.
- Each division is allocated a budget for purchasing research and development services from the laboratory.
- The laboratory is directly accountable to the divisional heads for this expenditure.
Second Laboratory:
- Performs contract investigation activities for other laboratories and body care companies.
- Earns 75% of its revenue from external customers, representing 18% of the organization’s total revenue.
- The head of the second laboratory is directly accountable to the Chief Operating Decision Maker (CODM), and the CODM regularly reviews its performance, operating activities, resource allocation, and financial results.

Fine Face Limited is uncertain whether the two laboratories should be reported as separate segments under IFRS 8 – Operating Segments.

Required:

Advise the directors of Fine Face Limited on this issue. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chief Operating Decision Maker (CODM), IFRS 8, Operating segments, R&D
Level: Level 3

Topic: Segment Reporting (IFRS 8)

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

Question

Puppsy PLC had identified the following segments in its annual financial statements for the year ended September 30, 2020:

i. Segment A
ii. Segment B
iii. Segment C

Required:
Advise Puppsy PLC on how the above issues should be dealt with in its financial statements for the year ended September 30, 2020.
(10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Conditional Asset Transfer, Contractual Obligations, Fair Value Measurement, Operating segments, Public Sector Contracts, Renovation Costs, Segment Reporting
Level: Level 3

Topic: Segment Reporting (IFRS 8)
Series: NOV 2023

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

Question

Required:
Distinguish between operating segments and reportable segments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Reporting, IFRS 8, Operating segments, Reportable Segments
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAR 2024

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Discontinued Operations, Held for Sale, IFRS 5, Non-current Assets, Operating segments
Level: Level 3

Topic: IFRS 5: Non-current assets held for sale and discontinued operations
Series: MAY 2018

Question Tag: Operating segments

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Operating segments

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

You're reporting an error for "CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)"

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

You're reporting an error for "CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)"

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

You're reporting an error for "CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)"

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

You're reporting an error for "FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,"

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

You're reporting an error for "CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations"

CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)

Advise on reportable operating segments based on IFRS 8 criteria for Jafuwara PLC

You're reporting an error for "CR – May 2023 – L3 – Q7b – Segment Reporting (IFRS 8)"

CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)

Advise on whether research and development laboratories should be reported as separate segments under IFRS 8.

You're reporting an error for "CR – May 2023 – L3 – Q7a – Segment Reporting (IFRS 8)"

CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)

Guidance on segment reporting and accounting for a conditional building asset transfer and related costs.

You're reporting an error for "CR – Nov 2023 – L3 – SB – Q3 – Segment Reporting (IFRS 8)"

FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,

Explain the differences between operating segments and reportable segments as per IFRS 8.

You're reporting an error for "FR – March 2024 – L2 – Q2b – Financial Reporting Standards and Their Applications,"

CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

Explain whether certain scenarios meet the criteria for classification as discontinued operations under IFRS 5.

You're reporting an error for "CR – May 2018 – L3 – Q2d – IFRS 5: Non-current Assets Held for Sale and Discontinued Operations"

Our offerings

Contact Info

Customer

Get In Touch

admin