ACCOUNTING FOR CORPORATE STRUCTURES
Segment Reporting:
'AASB 8 requires that an entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates'. [par. 1]
This assignment/ assessment is on segment reporting. It consists of both a general theory part and an application part that involves researching Fisher & Paykel Healthcare Corporation Ltd (ASX ticker: FPH) 2016 annual report on its disclosure practices in relation to segment reporting.
Requirements:
1. In your own words, discuss the arguments for and against segment reporting as required by AASB 8. Do you think the proposed benefits of segment reporting outweigh its costs?
2. Critically evaluate the segment information disclosed in the annual report to ascertain if the disclosure practice of the company complies with the requirements of AASB 8 as regards the definition of 'operating segments' and 'reportable segments'. [hint: you may wish to verify the reportable segments disclosed by referring to the various quantitative thresholds adopted in AASB 8].