4 Steps Of Identifying Operating Segments Under IFRS 8

An example of Identifying operating segments under IFRS 8 — Company A has a chief executive officer (CEO), a chief operating officer (COO) and an executive committee comprising the CEO, COO and the heads (general managers) of three business units — Xenon, Yellow and Zebra. Every month, financial information is presented to the executive committee for each of business units Xenon, Yellow and Zebra and for Company A as a whole in order to assess the performance of each business unit and of the company as a whole. Units Xenon, Yellow …

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IFRS 8 Controversy – Why IFRS 8 Is Controversial (Part-2)

It is also notable that two IASB board members dissented from the issuance of IFRS 8 (refer to the dissenting opinion in IFRS 8) because of the lack of definition of segment profit or loss and because IFRS 8 does not require consistent attribution of assets and profit or loss to segments. In addition, these board members also believed that the changes from IAS 14 were not justified by the need for convergence with US GAAP because IAS 14 is a disclosure standard and therefore does not affect the reconciliation …

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IFRS 8 Controversy – Reasons Why IFRS 8 Is Controversial

In Europe, the replacement of IAS 14 with IFRS 8 was highly controversial, mainly because of the management approach allowed by IFRS 8 compared with the more prescriptive approach previously required by IAS 14. The management approach in IFRS 8 requires segment information to be reported externally based on how information is reported internally to the company’s management. In contrast, IAS 14 had contained very prescriptive requirements as to what should be reported and how. The European Parliament is required to endorse all IASB standards and IFRIC interpretations in order …

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Importance Of Understanding Business Process

To run a business properly, one should understand the internal process of that business. The P2P (Procure to Pay) and O2C (Order to Cash) are the two most important processes which every manager should understand well. This will help them to align the operational transactions he deals within the business. Manufacturing process begins from procuring raw materials to warehousing the final product which is saleable. Procurement Process itself has some internal procedures which are to be maintained properly, in order to ensure transparency and accountability. I will shortly explain the …

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Opinions With Regard To Capitalization Of Spare-parts

Capitalization of engineering spare-parts to a machine or equipment is somewhat argumentive and can have different opinions. How to identify which items are to capitalize, items’ value upto how much, how much longivity should be, etc may have different opinions. Company to company may have different policies and practices  of capitalization of spares. There are thousands of items in an engineering stock. One item may have multiple aspects to consider before doing capitalization. Let us have a look on the aspects which may come while doing capitalization. Longivity of the …

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Auditing Inventory Valuation – A Time Consuming Effort

Auditing a manufacturing company and a service providing company are not the same in both practical and tactical point of view. The auditos have to adopt different strategy for different companies. Audit checklist also vary from company to company. Let us have a look on what an auditor can see in a manufacturing company. Inventory Valuation for Materials: An auditor should check whether inventory valuation is over or under stated or not. First, he has to excercise a pure stock-take at a cut-off date determined by the management of the …

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What Does Storage Mean? What Is Storage

Storage in its primary sense is an exercise of human foresight by means of which commodities are protected from deterioration and surplus supplies are carried over for future consumption in seasons of scarcity. The Definitions Committee of the American Marketing Association defines storage as -holding goods between the time of their production and their final sale.”This definition fails to emphasize the need for providing the proper facilities and the correct temperature under which many goods must be stored. So we may define storage as follows: storage refers to the holding …

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ERP And Data Analytical Ability Are Simultaneous Needs

Many organizations runs with ERP systems, nowadays. And almost all the important data are captured in the system by means of various modules, for example Account Receivables, Accounts Payables, General Ledger, Order Management, Suppy Chain, Projects, etc. So, ERP is compared to be a data-sea or a datamine. Looking for a reliable information is not so easy here. To find an important information of your need, you will have to sail in this data-sea almost at all times. So why not we go for learning Advanced Excel, yet? Advanced Excel …

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Variances Really Suck The Company’s Growth

We have learnt that favorable and unfavorale variances are adjusted to Cost Of Goods Sold to derive the Gross Profit in a business operation. Eventhough favorable variances have positive and unfavorable variances have negetive impacts on the Gross profit, ultimately no variance can influance the Net Profit of  business operation. Thus, no variance is desirable. In this article, I would emphasise on Materials Price Variance and it’s impacts on Gross Profit. In the later articles, I would discuss the impacts of other variances associated with business operations. A procurement manager …

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Free ERP Software Prextra And Its Modules

Do you think for affordable accounting software? Prextra is made for you, then. Prextra is a business management platform developed in Quebec, Canada. It is a cutting-edge information technology and can meet your accounting and other business needs also. It is affordable in price, quality and a good candidate for the best free accounting software. The software is a user friendly and integrated ERP System. A user or an SME who is in need of basic accounting will find everything in this small accounting software. The software is developed into …

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