1.41 Go to the CSR
website (www.csr.com.au) and locate the
segment report in the latest exam bank financial statements.
a.
What do you think is
the purpose of the segment report?
b.
What operating
segments does CSR have?
c.
How do you think
this information would benefit stakeholders of financial statements?
d.
Can you think of any
disadvantages of disclosing this information for CSR Ltd?
a.
The purpose of the segment report is to inform users of
financial reports of information relating to the various revenue earnings
segments of the business. The segment report also provides a description and
definition of each of the segments including the exam bank physical location of that
segment. The segment report also provides the profit/loss of each segment,
total assets and total liabilities of each segment.
b. The
operating segments of CSR Ltd are building products, glass, aluminium and property.
c. This
information would benefit various stakeholders of the company. Understanding the different profits of the
operating segments will assist users in
forecasting future exam bank profits as it allows users to gain insight into the relative
risks and returns of the different segments, compared to a consolidated report which would just focus on the total figure
and not enable individual assessment
of each of the sections of the business.
d. The
disadvantages of disclosing this type of information by the firm would include the additional costs in preparing
and disseminating this information and also potential proprietary costs arising
from disclosing potentially sensitive
information to market competitors.
1.42 Refer to the
latest financial statements for JB Hi-Fi Ltd (the notes to the 2012 consolidated
financial statements of JB Hi-Fi appear in the appendix to this book and the
statements are available at www.jbhi.com.au). For each of the following
stakeholders, give an illustration of a report or a note that would be useful
for decision-making purposes, state why the information is useful, and give an
example of how that information would be used to question bank download.
a. Prospective investors
b. Customers
c. Employees
d. Suppliers to JB Hi-Fi Ltd
e. Auditors
f. Charity organisations
g. Australian Taxation Office
a. JB
Hi-Fi Ltd’s prospective investors – All financial statements, auditor’s report
and directors’ report. This information would be useful to help them question bank download assess the
performance and position of the entity at the end of the financial period and
what their future potential investment opportunities are.
b. Customers
– Income Statement, notes on income and also notes on provisions such as
warranties.
This
information can assist in determining the profitability of the business and by
looking in the notes, the main sources of income for the business. Product
warranty information may provide them with estimates on the percentage of
products returned to the entity.
c. Employees
of JB Hi-Fi Ltd. – All financial statements, note 2 (v) share based payments to
employees. Employees are going to be interested in future question bank download profitability and
cash flow. Job security, promotional opportunities will be of interest to
employees. They will also seek information on remunerations such as employee
share based plans.
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