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Task 1 chapter 7

1. A multinational company, M&M plc, classifies its business into eight business segments (segments A-H). A summary of the business activities of each segment for 2020 is shown in the table below:

	Total segment revenues (inclusive of inter-segment revenues)	Segment result Profit/(Loss)	Identifiable segment assets
	OMR,000	OMR,000	OMR,000
A	268,800	126,720	565,760
B	89,600	(29,568)	275,456
C	340,480	105,600	632,320
D	179,200	84,480	579,072
E	111,104	29,568	232,960
F	100,352	(42,240)	219,648
G	21,504	27,456	93,184
H	17,920	(6,336)	83,200
Total	1,128,960	295,680	2,681,600
Inter-co elimination	80,640	21,120	99,840
Consolidated total	1,048,320	274,560	2,581,760

Additional information: Segment As total segment revenue included OMR37,400,000 of inter-segment sales, and segments D and Fs total segment revenues included OMR28,240,000 and OMR15,000,000 of inter-segment sales, respectively.

Required

1. Briefly discuss the objectives of segmental reporting adopted by listed companies in annual reports. (3 marks)
2. Determine which of the eight (8) business segments listed in the table above would be classified as reportable segments based on the quantitative thresholds defined in IFRS 8 Operating Segments. Show ALL related workings and provide brief justifications for your answer.

(7 marks)

3. Based on your answer to section (i) above, determine whether the reportable segments represent sufficient operations (based on the 75% threshold test required in IFRS 8) and briefly discuss how the other business segments below the thresholds (if any) should/can be treated in the segment note.

(5 marks)

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