One or the other of the segment types had to be designated as the primary reportable segments, while the other type had to be the secondary reportable segments. The issue of segment reporting has been on the agenda of the convergence project between the IASB and the FASB (the main standard setter in the United States of America). Operating segments that do not meet any of the criteria may be disclosed if management believes the information would be useful to users of the financial statements.
If revenue from a single external customer is 10% or more of the entity's total revenue, it must disclose that fact and the segment reporting the revenue. How this should be presented to external users of the accounts should be considered. There is flexibility in the definition of some of the items to be disclosed (notably net assets).
The titles and responsibilities of the directors or executive management team imply an organizational structure that is not reflected in the operating segments. None of these segments has ever met any of the quantitative thresholds for defining reportable segments. Revenue from a customer of the software and hotels segments represents approximately £400 million of the entity's total revenue.
When assets (or disposal groups) are classified as held for sale, their carrying amount at the date of classification should be compared with the 'fair value less costs to sell' of the asset (or disposal group).
Meaning and significance of ‘discontinued operations’
Meaning
As far as disposal groups are concerned, it is acceptable to present totals on the face of the balance sheet with a more detailed breakdown in the notes. Depreciable assets classified as 'held for sale' should not be depreciated from the date of classification, as the classification implies that management's intention is primarily to recover the value of such assets through sale, rather than through continued use. If the accounting value exceeds fair value less selling costs, the excess must be treated as an impairment loss.
In the case of a disposal group, the impairment loss must be allocated to special assets in the order set out in IAS 36 – Impairment.
Significance
The individual amounts shown above were the numbers that were . presented in the consolidated income statement.).
IAS 10 – events after the reporting period 4
- Adjusting events
- Non-adjusting events
- Dividends
- Going concern issues
In certain circumstances, the financial statements must be adjusted to reflect the occurrence of such events. These are events after the reporting period that provide additional evidence of conditions existing at the year-end date. Sales of inventories after date that provide additional evidence of the net realizable value of the inventories at the reporting date.
Evidence received after year-end that provides additional evidence of the correct measurement of a liability that existed at the reporting date. The revaluation of an asset, such as real estate, that indicates the likelihood of impairment at the reporting date. As you might expect, IAS 10 requires that the occurrence of adjusting events must result in the financial statements themselves being adjusted.
These are events occurring after the reporting period that relate to conditions that did not exist at the statement of financial position date. After the reporting date, the game recordings of two footballers have been purchased for a total amount including the related costs which are due after more than one year. A dividend is 'declared' when its payment is no longer at the discretion of the reporting entity.
For final dividends this usually happens when the shareholders approve the dividend at a general meeting to approve the financial statements, which cannot be done until the financial statements are prepared. Deterioration of operating results or other major losses that occur after the end of the period are essentially non-adjusting events. However, if they are of such importance as to affect the going concern basis of preparation of the financial statements, then this affects the numbers in the financial statements because the going concern assumption would no longer be appropriate.
In this limited set of circumstances, an event that would normally be non-adaptive is effectively treated as adaptation.
Related party disclosures
- Definition of ‘related party’ – a person
- Definition of related party – another entity Another entity (AE) is related to E if
- Parties deemed not to be related parties
- Disclosure of controlling relationships
- Disclosure of compensation of key management personnel
- Disclosure of related party transactions
- Exemption from disclosures re: government-related entities
E is the joint venture of a third entity and AE is an associate of the third entity, or vice versa. AE is controlled or jointly controlled by any person who is a related party of E (see 9.8.1 above). A related party transaction is a transfer of resources or obligations between a reporting entity and a related party, regardless of whether a price is charged.
If such transactions have occurred, the entity should disclose the nature of the related party relationship and information about those transactions and outstanding amounts so that the user can understand the potential effect of the relationship on the financial statements. The sale of companies from the Unilever group to Unilever Jeronimo Martins and Pepsi Lipton International amounted to EUR 91 million and EUR 14 million, respectively (EUR 84 million and EUR 12 million, respectively). Agency fees payable to Johnson Diversey in relation to sales of Unilever brand products through their channels were approximately 20 million to 24 million).
Since the Langholm fund was launched in 2002, Unilever has invested 76 million in Langholm, with an outstanding commitment at the end of 2009 of 21 million dollars. The objective of IAS 24 is to provide the necessary disclosures to draw attention to the possibility that the financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments, with these parties. These disclosures are intended to alert users that related party transactions have occurred and provide an indication of their extent.
The Board did not intend to require the reporting entity to identify each government-related entity, or quantify in detail each transaction with such entities, because such a requirement would nullify the exemption.
Summary
REVIEW QUESTIONS
EXERCISES
The following breakdown is given of the company's results in three divisions and headquarters: The main part (£40,000) of the claim referred to goods to be delivered before the end of the year. This event is likely to threaten the business's ability to continue as a going concern.
You are the financial controller of the entity and its consolidated financial statements for the year ended 31 March 2009 are being prepared. The board of directors receives a monthly report on the activities of the five significant operating areas of our business. I believe that the present value of the future rental payments related to this property at March 31, 2009 was $6 million.
The estimated net proceeds from the disposal of the rightful connections are $29 million and all rightful connections should realize a profit. e). The carrying value of plant and equipment owned by the affected subsidiaries at March 31, 2008 was $18 million. Please tell me how the decision to limit the activities of the three subsidiaries affects the financial statements.
You are the financial controller of the entity and the consolidated financial statements for the year ended September 30, 2008 are being prepared. Business segment operating losses for October, November and December 2008 are estimated at $10 million. Your assistant is unsure to what extent the above transactions involve liabilities that should be included as a closing provision in the financial statements.
The depreciable element of the property was estimated at $8 million at 31 March 2006 and the useful economic life of the depreciable element was estimated to be 25 years from that date. Show the impact of the construction of the production line and the decision to sell the property on Omega's income statement for the year ended March 31, 2007, and on its balance sheet as at March 31, 2007. The depreciable amount of this property was estimated at $3.2 million at 31 March 2006 and the estimated future economic life of the property at 31 March 2006 was 20 years.
The restructuring was not fundamental and will not have a material effect on the nature and focus of the company's operations. Some are still outstanding and the liquidator of Dynatron is expected to pay around 25p in the pound to unsecured creditors.
