Internal Financial Reporting System and Temporal Method of Translation
Topic 1
Segment information is reported based on the internal financial reporting system of the company rather than the authoritative accounting requirements based on GAAP. Analyze the disclosure reporting requirements related to each separately reportable operating segment. Give your opinion as to whether disclosures provide financial statement users beneficial information for investment or credit decisions. Provide examples to support your response.
Topic 2
Analyze the underlying conceptual differences between the temporal method of translation and the current rate method of translation when determining why balance sheet exposure differs under the two methods. Which method do you see providing the most minor balance sheet exposure and why? Provide a rationale for your selection.
Finance
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Finance
The IFRS 8 requires organizations to disclose information on publicly traded securities. The disclosure requirements that this international authority has put in place include general information on how an organization identifies its operating segments and how the product categories from which the operating segments get their revenues. Under GAAP, an operating segment is involved in business activities in which revenue is earned and expenses are incurred. Also, the operating segment has discrete financial information; hence it constitutes two main reportable segments. The first reportable segment is the external and internal revenue, 10% or more of the combined revenue (Aboud & Roberts, 2018). The second reportable segment is that the profit and loss is 10% of the combined profit for the profit-making segment or the combined loss for the loss-making segment.
Disclosures accord financial information users with essential data for credit and financial decisions. It facilitates the allocation of resources where it provides security information, making the management have an idea about the security's performance, which ultimately enables them to work i...