Segment Reporting

International Financial Reporting Standards, in many ways, are similar to Generally Accepted Accounting Principles (GAAP) however, a few key differences do exist. One of the differences to be most aware of would be necessary changes. “Many companies will need to make significant changes to existing accounting policies to comply with International Financial Reporting Standards (IFRS), including such key areas as revenue recognition, inventory accounting, financial instruments and hedging, employee benefits plans, impairment testing, provisions, and stocked-based compensation.” ("PWC", 2014) Of these listed areas of particular concern for Chester Inc. will be revenue recognition, inventory, and financial statements. Changes in these areas are not just structural or largely cosmetic in nature,

Globalization has been changing the world. It has interconnected people, nations, and even businesses. Today´s business can share information to investors around the world thanks to the intelligent software of the actual society. Being more specific, the way in which investors and users evaluate businesses performance is through the information contemplated in their financial statements. These financial statements illustrate the current assets, liabilities, and stockholder equity a company has in order to help users take economic decisions. However, not all the companies are regulated to provide the same structuralized information around the world. Each country possesses its own accounting standard that regulates the preparation of financial statements of a company. In that way, companies’ information might differ between countries making the comparability between financial statements difficult to be implemented by users in order to assess the performance of foreign businesses. In view of the need of a globally accepted accounting standard that promotes uniform standards for worldwide financial reporting, the International Accounting Standards Committee (IASC), which then becomes replaced by the International Accounting Standard Board in 2001, was created (Cathey and Schroeder 130). The IASB issues International Financial Reporting Standards (IFRS) that stands as the set of accounting standards that prepare and present the financial

Epstein, B. J., & Jermakowicz, E. K. (2009, April). IFRS Converges to U.S. GAAP on Segment Reporting. Retrieved January 30, 2013, from Journal of Accountancy: http://www.journalofaccountancy.com/Issues/2009/Apr/20081008.ht

IFRS’s are a single set of accounting standards at a global level for all sectors. Accounting standards are trustworthy statements is the reflection of financial statements to be presented to the stakeholders . United kingdom has already adopted IFRS since 2005.I would be discussing on adoption of IFRS by United kingdom for this paper. The United

The U.S is moving toward IFRS (Forgeas, 2008). In the near future, all US company may need to report financial statements under IFRS. This makes the adaptation of IFRS unavoidable. Recently, some large multinational

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who have a stake in the company want to know this information before providing a service. In this paper, International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared for

IASB. 2010, "The Conceptual Framework for Financial Reporting" IFRS, pp. A21- A38, viewed 23 April 2014,

In order to help users of financial statements better understand the public entity 's operations and make more informed decisions about the public entity 's operating matters, publicly-held companies are required to disclose the segments and related information about the different types of activities in which the company engages and the different economic environments in which the company operates. According to FASB Accounting Standards Codification, public entity is a business entity or a not-for-profit entity that issues securities in public market or is required to files financial statements with SEC. FASB provides guidance regarding the disclosure in the notes to financial

It has come to my attention that you do not have an effective segmentation framework in place for your financial record-keeping and reporting processes, and I thought I would offer some assistance in this regard. Not only will a more effective segmentation plan ensure compliance with reporting standards and regulations, but in an industry with margins as thin and costs as high as running a movie theatre, this segmentation could radically improve your bottom line (Young, 2003; Campea, 2007). The following brief outline of a segmentation system and a cost allocation plan should provide you with an idea of the improvements that can be made.

According to IFRS 8 (para.11) “An entity shall report separately information about each operating segment that has been identified or that results from aggregating two or more of those operating segments according to para. 12 of IFRS 8 if each operating segment of the operating segments exceeds the quantitative threshold. To summarize, operating segments which fulfils with the aggregation criteria and meet the quantitative thresholds are externally reportable segments.

Agents, for example, have the tendency to withhold information because they are afraid that competitors will take advantage of this information or because they do not want trade unions or employees to use the information to compare earning figures from different segments (Thoen & Lefebvre, 2001).

IFRS addresses practical application issues that any entity is supposed and expected to encounter within the standards. These practical issues provide a comprehensive analysis. For instance, IFRS 1 provides extensive guidelines “…and addresses practical application issues that a first-time adopter of IFRSs could expect to encounter when transitioning to IFRSs”. (KPMG, 2009). The IFRS, being principle-based, generally do not contradict with Generally Accepted

International Financial Reporting Standard (IFRS 8) ‘Operating Segments’ is the first Standard of the International Accounting Standards Board (IASB) to be subject to a post-implementation review (PIR). IFRS 8 allows investors and other users of financial statements to see the company’s operations through the eyes of management (‘the management-perspective approach’) would enable investors to understand the risks that management face each day and to assess how well those risks are managed.

suggestions made by the IFRS Advisory Council, Consultative groups and accounting standard-setters, and public education sessions