Filios Products plc owns a chain of hotels through which it provides three basic services; restaurant facilities, accommodation, and leisure facilities. The latest financial statements contain the following information:

The following breakdown is provided of the company’s results into three divisions and head office:

Required:

(a) Outline the nature of segmental reports and explain the reason for presenting such information in the published accounts.

(b) Prepare a segmental statement for Filios Products plc for complying, so far as the information permits, with the provisions of IFRS 8 – Operating Segments – so as to show for each segment and the business as a whole:

(i) Revenue;

(ii) Profit;

(iii) Net assets.

(c) Examine the relative performance of the operating divisions of Filios Products. The examination should be based on the following accounting ratios:

(i) Operating profit percentage;

(ii) Net asset turnover;

(iii) Return on netassets.

Transcribed Image Text:

Statement of financial position of Filios Products £m ASSETS Non-current assets at book value 1,663 Current assets Inventories and receivables 381 Bank balance 128 509 Total Assets . 2,172 EQUITY AND LIABILITIES Equity Share capital 800 Retained eamings 1,039 1,839 Non-current liabilities: 140 Long-term borrowings Current liabilities 193 Total Equity and liabilities 2,172