segmental reporting – Accounting Crash Course

Sample Disclosure – Accounting Policy Of Operating Segments Reporting (17 March 2011)

Operating Segments

In the previous financial years, the Group deemed a segment as a distinguishable component of the Group that was engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment) which was subject to risks and rewards that were different from those of other segments.

Following the adoption of FRS 8 Operating Segments, an operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the Chief Operating Officer (CEO), acting as the chief operating decisions maker of the Group. The CEO makes decisions about resources to be allocated to a segment of the Group, and assesses its performances, for which discrete financial information is available for him/her to make the decisions.

However, as the Group have remained dormant, the adoption of FRS 8 Operating Segments does not have any impact to the presentations and disclosures required to be made in the financial statements.

Sample Disclosure – Accounting Policy Of Operating Segments Reporting (25 November 2010)

Operating Segments Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker of the Group. The chief operating decision-maker of the Group, who is responsible for allocating resources and assessing performance of the operating segments, is the Chief Operating Officer (“COO”) of the Group who has the authority to make strategic decisions on the operations of the Group.

Sample Disclosure – Segmental Information Change In Accounting Policy And Note (13 October 2009)

SEGMENTAL INFORMATION

a) Change in accounting policy

Prior to 30 April 2008, the Group presented its segmental information only by geographical segment as the Group’s activities were predominantly in the sector of property development and manufacturing of environmental friendly industrial disposal bins. The directors decided that changes to its group activities of venturing into trading of consumer healthcare products and discontinued of manufacturing segment warrant a change in presentation of its segmental information to give a fairer presentation of the results and the financial position of the Group.

This change in accounting policy did not give rise to any adjustments to the opening balances of retained profits of the prior and current year and comparative figures and presentation of previous year’s segmental information have not been restated as the Group’s activities in prior year were predominantly in predominantly in the sector of property development and manufacturing of environmental friendly industrial disposal bins.

b) Reporting segment

The primary and only segment reporting format for the current financial year is determined to be business segments as the Group’s risk and return in its business activities engaged are predominantly determined by differences in its products and services. No segment is presented in respect of the Group geographically segment, as the Group operated principally now in Malaysia.

The directors are of the opinion that all inter-segment transactions entered into are in the normal courses of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with third parties.

Sample Disclosure Of Notes To Financial Statements On Change In Accounting Policy On Segmental Information

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