You are the financial controller of Olga, a listed entity that prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The chief executive officer (CEO) of Olga has reviewed the draft consolidated financial statements of the Olga group and of a number of the key subsidiary companies for the year ended 31 March 2019. None of the subsidiaries are listed entities but all prepare their financial statements in accordance with IFRS. The CEO has sent you an email with the following query:

Queries

I notice that the disclosures relating to operating segments in the consolidated financial statements appear to be based on the geographical location of the customers of the group. I am the non-executive director of another large listed entity and the segment disclosures in their consolidated financial statements are based on the type of products sold. Also some of our larger subsidiaries have customers located in more than one geographical region, yet they provide no segment disclosures whatsoever in their individual financial statements. I would like to see segment disclosures given in the individual subsidiary accounts as well. I really don’t understand these inconsistencies given that all these financial statements have been prepared using IFRS. 

Required:

Provide your answer to the queries raised by the chief executive officer. Your answers should refer to relevant provisions of International Financial Reporting Standards.

Answer rating: 100% (QA)

IFRS 8 Operating Segments is the relevant IFRS for operating segments The disclosures in IFRS 8 focu... View the full answer