100%(1)1 out of 1 people found this document helpful
This preview shows page 1 - 2 out of 3 pages.
OB(trade and other receivables) + acq+ sales revenue-cash receipts from customers*- provisions (write off)=CB. Provisions for doubtful debts:OB + acq + doubtful debts exp – acc rec (write off)* = CB. 2. OB (inventory) + acq- COGS+ purchases* = CB. 3. OB (trade payables) + acq+COGS+operating expense-cash payments to supplier*= CB. 4. OB (non current assets) + acq- dep’n exp + cash paid for purchase of assets* =CB. 5. OB (Goodwill)+contribution-impairment loss+cash payment*= CB. 6. OB (DTL)+acq+ Revaluation – DTE* = CB; DTE+closing ITE=current tax expense; OB (income tax payable) + current tax expense- income tax paid*= CB. Consolidation and segment: Consolidation ac-counting involves an aggregationprocess that reports financial information for a group of related entities as if they were a single entity. By con -trast, segment reporting for diversified economic entities involves the disaggregation of consolidated financial information into business and ge -ographical segments based on the internal reporting system. Management approach: segment data is not unique in accounting for its relianceon professional judgment in respect of classifications and cost allocations; Investors as a group are sophisticated and look beyond short-termlosses on start-up projects in their assessment of management performance; Single segment enterprises cannot hide the financial performanceand financial position of their segment so why should multi-segment enterprises be so allowed; The use of the internal management and report-ing structure as the basis of identifying reportable segments should mean that internal segment information is often readily available and will re -quire only minimal adjustment before being presented as the external segment information. Segment reporting: Some insight into the detail ofthe business and so some understanding for users of where the key risks and returns are. Without segment reporting, CFS would lack detailed in-formation about the main sources of revenues, and earnings; CFS would not provide detailed information about the main activities the group isundertaking, where the assets are located, how successful are each of those business elements and to what extent might profitable segments besupporting unprofitable ones; reveals more about new activities that management has invested in. Provide “insight” so users can make informeddecisions: Better understand entity’s performance; Better assess the risk & returns of different parts of an entity; An indicator of future cashflows. Shareholders and other users can thereby gain some understanding of how the entities may be exposed to different geographical & busi -ness risks and opportunities; Ethical investors and others seeking to discriminate can determine whether the group operates in segments that areunsuitable to them (e.g. gambling); Mitigate mispricing of shares (geographic data help shareholders improve their prediction more accurate); in-crease the forecast accuracy of analysts; signal future earnings.Research evidence indicates that the qualitative