Question 1

Which of the following statements is correct about the controversial issues surrounding IFRS 8?

Accepted Answer

A)  The management approach adopted in IFRS 8 was argued to put preparers' needs ahead of users' needs. 
B)  Despite the objections from different parties, all IASB board members at the time unanimously agreed that IFRS 8 should replace IAS 14. 
C)  The European Parliament was not able to endorse IFRS 8 due to strong oppositions from European countries. 
D)  The proponents of IAS 14 argued that IFRS 8 contains too many mandatory disclosure requirements compared to IAS 14. 
A)  The management approach adopted in IFRS 8 was argued to put preparers' needs ahead of users' needs. 
B)  Despite the objections from different parties, all IASB board members at the time unanimously agreed that IFRS 8 should replace IAS 14. 
C)  The European Parliament was not able to endorse IFRS 8 due to strong oppositions from European countries. 
D)  The proponents of IAS 14 argued that IFRS 8 contains too many mandatory disclosure requirements compared to IAS 14. A

Question 2

IFRS 8 Operating Segments is primarily a:

Accepted Answer

A)  disclosure standard; 
B)  measurement standard; 
C)  definition standard; 
D)  conceptual standard. 
A)  disclosure standard; 
B)  measurement standard; 
C)  definition standard; 
D)  conceptual standard. A

Question 3

Compared to IAS 14 Segment Reporting, IFRS 8 Operating Segments can be described as being:

Accepted Answer

A)  more closely aligned to other accounting standards; 
B)  preferred in the European Union to its predecessor; 
C)  less prescriptive; 
D)  less onerous in terms of disclosure. 
A)  more closely aligned to other accounting standards; 
B)  preferred in the European Union to its predecessor; 
C)  less prescriptive; 
D)  less onerous in terms of disclosure. C

Question 4

Which of the following statements is correct?
Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

Accepted Answer

A)  IFRS 8 requires additional disclosures about any reliance on major customers. 
B)  IFRS 8 requires an entity to identify primary and secondary segments. 
C)  IFRS 8 requires that the majority of a segment's revenue be from external sources in order for it to be identified as a reportable segment. 
D)  IFRS 8 requires that the amount of each segment item reported be the measure determined in accordance with the entity's IFRS accounting policies. 
A)  IFRS 8 requires additional disclosures about any reliance on major customers. 
B)  IFRS 8 requires an entity to identify primary and secondary segments. 
C)  IFRS 8 requires that the majority of a segment's revenue be from external sources in order for it to be identified as a reportable segment. 
D)  IFRS 8 requires that the amount of each segment item reported be the measure determined in accordance with the entity's IFRS accounting policies.

Question 5

One of the conditions used to determine if two or more operating segments may be aggregated into a single operating segment is:

Accepted Answer

A)  the segments have the same manager in charge; 
B)  the aggregation is deemed to provide useful information for users; 
C)  the segments have similar operating results; 
D)  the segments have similar methods used to distribute their product or provide their services. 
A)  the segments have the same manager in charge; 
B)  the aggregation is deemed to provide useful information for users; 
C)  the segments have similar operating results; 
D)  the segments have similar methods used to distribute their product or provide their services.

Question 6

Which of the following statements is incorrect?
IFRS 8 requires external revenue by product to be disclosed on an entity wide basis by all entities to which IFRS 8 applies:

Accepted Answer

A)  unless the information has already been provided as part of the reportable segment information; 
B)  unless the information is not available and the cost to develop it would be excessive; 
C)  and must be calculated based on the financial information used to produce the entity's financial statements; 
D)  unless providing such information would be considered to damage the entity's competitive advantage. 
A)  unless the information has already been provided as part of the reportable segment information; 
B)  unless the information is not available and the cost to develop it would be excessive; 
C)  and must be calculated based on the financial information used to produce the entity's financial statements; 
D)  unless providing such information would be considered to damage the entity's competitive advantage.

Question 7

IFRS 8 prescribes that an operating segment must be identified on the basis of:
Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

Accepted Answer

A)  geographic location; 
B)  predominant sources of risks and returns; 
C)  the way information is reported internally to the CODM; 
D)  the usefulness of financial information available to users. 
A)  geographic location; 
B)  predominant sources of risks and returns; 
C)  the way information is reported internally to the CODM; 
D)  the usefulness of financial information available to users.

Question 8

IFRS 8 requires disclosure in relation to which of the following?

Accepted Answer

A)  the basis of accounting for all segments; 
B)  the nature of any difference between the measurement of the reportable segments' revenue and the entity's revenue; 
C)  the nature of any difference between the measurement of the reportable segments' assets and liabilities and the entity's assets and liabilities; 
D)  the nature and effect of all symmetrical allocations to reportable segments. 
A)  the basis of accounting for all segments; 
B)  the nature of any difference between the measurement of the reportable segments' revenue and the entity's revenue; 
C)  the nature of any difference between the measurement of the reportable segments' assets and liabilities and the entity's assets and liabilities; 
D)  the nature and effect of all symmetrical allocations to reportable segments.

Question 9

A key objective of providing financial reporting information by segment is:

Accepted Answer

A)  to allow detailed analysis to be undertaken by users such as segment profit margin analysis; 
B)  to allow the user to better understand the entity's future performance; 
C)  to highlight poorly performing areas of an entity's business to users; 
D)  to allow users to better assess the entity's risks and returns. 
A)  to allow detailed analysis to be undertaken by users such as segment profit margin analysis; 
B)  to allow the user to better understand the entity's future performance; 
C)  to highlight poorly performing areas of an entity's business to users; 
D)  to allow users to better assess the entity's risks and returns.

Question 10

Bloomsville Ltd has a board of directors that consist of a Managing Director (MD) and non-executive directors. The MD has a regular monthly meeting with the Chief Operating Officer (COO) and the managers of Bloomsville's three business units. During the meeting, each manager would present an update of their unit's financial performance. The financial information is then reviewed by the MD and the COO to assess the performance of each business unit and to make decisions related to resource allocation. In this case, who is the CODM of Bloomsville?

Accepted Answer

A)  The board of directors. 
B)  The MD and the COO. 
C)  The MD, the COO, and the three managers. 
D)  The MD only. 
A)  The board of directors. 
B)  The MD and the COO. 
C)  The MD, the COO, and the three managers. 
D)  The MD only.

Question 11

CODM refers to:
Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

Accepted Answer

A)  Chief Of Divisional Management; 
B)  Chief Operating Decision Maker; 
C)  Company Operational Documentation Manual; 
D)  Company Official Director Meeting. 
A)  Chief Of Divisional Management; 
B)  Chief Operating Decision Maker; 
C)  Company Operational Documentation Manual; 
D)  Company Official Director Meeting.

Question 12

Which of the following information is not required to be disclosed by entities complying with IFRS 8?

Accepted Answer

A)  the identity of external customers from which the entity earns at least 10% of its revenue; 
B)  the total of the reportable segments' liabilities to the entity's liabilities; 
C)  the nature and effect of the changes in measurement of segment profit or loss; 
D)  revenues from external customers located in foreign countries. 
A)  the identity of external customers from which the entity earns at least 10% of its revenue; 
B)  the total of the reportable segments' liabilities to the entity's liabilities; 
C)  the nature and effect of the changes in measurement of segment profit or loss; 
D)  revenues from external customers located in foreign countries.

Question 13

Segment disclosures are designed to:

Accepted Answer

A)  combine components of consolidated financial data to provide a higher level of summarisation; 
B)  condense particular items of consolidated financial data into one financial statement; 
C)  disaggregate selected consolidated financial data; 
D)  aggregate revenues and expenses so that only net profit is shown for each important segment. 
A)  combine components of consolidated financial data to provide a higher level of summarisation; 
B)  condense particular items of consolidated financial data into one financial statement; 
C)  disaggregate selected consolidated financial data; 
D)  aggregate revenues and expenses so that only net profit is shown for each important segment.

Question 14

Under IFRS 8, entities are required to provide reconciliations on the followings, except for:

Accepted Answer

A)  the total of the reportable segment's measures of profit and loss to the entity's profit or loss; 
B)  the total of the reportable segment's equity to the entity's equity; 
C)  the total of the reportable segment's revenue to the entity's revenue; 
D)  the total of the reportable segment's liabilities to the entity's liabilities; 
A)  the total of the reportable segment's measures of profit and loss to the entity's profit or loss; 
B)  the total of the reportable segment's equity to the entity's equity; 
C)  the total of the reportable segment's revenue to the entity's revenue; 
D)  the total of the reportable segment's liabilities to the entity's liabilities;

Question 15

IFRS 8 Operating Segments applies to:
I. public companies
II. listed entities
III. entities in the process of listing
IV. any entity who voluntarily chooses to apply it

Accepted Answer

A)  I, II and III only; 
B)  II, III and IV only; 
C)  I, II and IV only; 
D)  I, III and IV only. 
A)  I, II and III only; 
B)  II, III and IV only; 
C)  I, II and IV only; 
D)  I, III and IV only.

Question 16

What is the reasonable maximum number of an entity's reportable segments according to the additional guidance provided in IFRS 8?

Accepted Answer

A)  8; 
B)  10; 
C)  12; 
D)  There is no maximum number provided in the guidance. 
A)  8; 
B)  10; 
C)  12; 
D)  There is no maximum number provided in the guidance.

Question 17

Huey, Dewey, and Louie are the three operating segments of Donald Company. Which of the following statements is correct based on the information provided below?

Accepted Answer

A)  Huey, Dewey, and Louie are reportable segments of Donald Company. 
B)  Only Dewey and Louie should be disclosed as reportable segments. 
C)  Dewey is not a reportable segment as it does not satisfy the profit/loss quantitative threshold. 
D)  Donald Company needs to identify another reportable segment from 'other business units' component. 
A)  Huey, Dewey, and Louie are reportable segments of Donald Company. 
B)  Only Dewey and Louie should be disclosed as reportable segments. 
C)  Dewey is not a reportable segment as it does not satisfy the profit/loss quantitative threshold. 
D)  Donald Company needs to identify another reportable segment from 'other business units' component.

Question 18

Under IFRS 8 all entities to which the standard applies are required to disclose:

Accepted Answer

A)  a reconciliation of total segment expenses to total consolidated expenses; 
B)  factors used to identify all segments; 
C)  the basis of accounting for any transactions between reportable segments; 
D)  a measure of segment liabilities. 
A)  a reconciliation of total segment expenses to total consolidated expenses; 
B)  factors used to identify all segments; 
C)  the basis of accounting for any transactions between reportable segments; 
D)  a measure of segment liabilities.

Question 19

Assuming the three business units below are operating segments and all revenue earned are from external customers, in which of the following scenarios does Colourband Ltd need to identify another reportable segment to be disclosed?

Accepted Answer

A)  I only. 
B)  I and II. 
C)  I and III. 
D)  II and III. 
A)  I only. 
B)  I and II. 
C)  I and III. 
D)  II and III.

Question 20

For financial reporting periods commencing prior to 1 January 2009, the accounting standard relating to segment reporting was:

Accepted Answer

A)  IFRS 8 Operating Segments; 
B)  IAS 14 Segment Reporting; 
C)  IAS 14 Operating Segments; 
D)  IFRS 8 Segment Reporting. 
A)  IFRS 8 Operating Segments; 
B)  IAS 14 Segment Reporting; 
C)  IAS 14 Operating Segments; 
D)  IFRS 8 Segment Reporting.

Exam 21: Operating Segments

Which of the following statements is correct about the controversial issues surrounding IFRS 8?

IFRS 8 Operating Segments is primarily a:

Compared to IAS 14 Segment Reporting, IFRS 8 Operating Segments can be described as being:

Which of the following statements is correct? Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

One of the conditions used to determine if two or more operating segments may be aggregated into a single operating segment is:

Which of the following statements is incorrect? IFRS 8 requires external revenue by product to be disclosed on an entity wide basis by all entities to which IFRS 8 applies:

IFRS 8 prescribes that an operating segment must be identified on the basis of: Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

IFRS 8 requires disclosure in relation to which of the following?

A key objective of providing financial reporting information by segment is:

CODM refers to: Leaning Objective 21.4 Briefly compare IFRS 8 with its predecessor standard IAS 14.

Which of the following information is not required to be disclosed by entities complying with IFRS 8?

Segment disclosures are designed to:

Under IFRS 8, entities are required to provide reconciliations on the followings, except for:

IFRS 8 Operating Segments applies to: I. public companies II. listed entities III. entities in the process of listing IV. any entity who voluntarily chooses to apply it

What is the reasonable maximum number of an entity's reportable segments according to the additional guidance provided in IFRS 8?

Huey, Dewey, and Louie are the three operating segments of Donald Company. Which of the following statements is correct based on the information provided below?

Under IFRS 8 all entities to which the standard applies are required to disclose:

Assuming the three business units below are operating segments and all revenue earned are from external customers, in which of the following scenarios does Colourband Ltd need to identify another reportable segment to be disclosed?

For financial reporting periods commencing prior to 1 January 2009, the accounting standard relating to segment reporting was:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters