Accounting Standard From The Financial Information...

EXECUTIVE SUMMARY AASB 8 is an important Accounting Standard from the financial information reporting perspective. It ensures that the entity has to disclose enough information to the user of financial information about the economic activities the entity is involved into and the scope or spread of these activities. The standard requires the entity to provide information about the reportable operating segments of the entity. Operating segments are the components of the entity of which separate financial information is available and it is regularly evaluated by the management – more specifically – the CODM – i.e. the Chief Operating Decision Maker to assess the performance of the particular component and to allocate resources in appropriate†¦show more content†¦The major focus of this report is on this concept. This report also tries to focus on making a thorough analysis of the management approach and also provide an in-depth discussion on operating segments. The report al so discusses the effects of using the management approach on the financial reports of companies by analysing the annual reports of Woolworth and Westpac. Differences between AASB 8 and the old accounting standards on segment reporting? The segment reporting is generated information and disclose company’s operation in the market with different rate of profitability, different degree of risk, and also for the different opportunities for growth.(Arthur, Luff, Keet, 2012) As core principle of Operating segments states: an entity shall disclose information to enable users of its financial statement to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. (AASB 8) Or it can understand like this, operating segment is reported in a specific way and consistent with internal reporting provided to the chief decision maker. 1.1 AASB 114 Key differences compared with AASB 8 The old standard on segment reporting was AASB114, and the new standard AASB 8 was applied beginning on or after 1 January 2009. The significant differences between the AASB114 and AASB 8, such as: AASB 114: was applied on 15 July