Wednesday, July 24, 2019

Do the requirements of IFRS 8 Operating Segments enhance the quality Essay

Do the requirements of IFRS 8 Operating Segments enhance the quality of information available to financial statement users - Essay Example The other purpose of such statements is to assist the stakeholders in decision making, regarding how to invest in the future, as these statements are a presumed to be a true reflection of the market value of the business organization as a whole. Financial statement users (stakeholders) have different interests and concerns regarding the financial statements of an organization. At this juncture, though, it is worth mentioning that financial statements are made up of statements of financial position, statements of comprehensive income, directors’ statements and statements of cash flows (Melta & Ankarath, 2010, pp. 200-413). The information provided in these statements work to serve different stakeholders in different ways. For example, the government is majorly interested in finding out the gross profit of an organization from a trading period, for the purposes of taxation. Shareholders on the other hand are interested due to what they expect from the organization in form of dividends. The other important financial statement users are potential investors, who are interested in knowing the true (market) value of any given business organization before deciding to invest their money in the same. These financial statements , for most of the organization especially public entities, are made public so as to enable the general public in addition to the stakeholders to have a look at the same. As much as this information is usually provided by the management, there has been a general feeling among stakeholders and business experts alike, that the information provided is always not sufficient to assist in decision making. According to many, the information provided is normally shallow, and contain approximations and assumptions that the financial statement users are not aware of. This usually leads to poor decision making that is influenced by an error of judgment, if not

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