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ACCA Strategic Professional · Strategic Business Reporting (International) · Other reporting issues

Orion plc has two operating segments, Retail and Wholesale, whose reportable status is clear. Management changes its internal structure so that a former 'Online' segment is merged into Retail for CODM reporting. Online was reportable in the prior year. Which treatment is required in the current-year financial statements?

Comparative segment information must be restated for the new structure unless it is unavailable and excessively costly to produce. In that case the entity discloses the current-period segment data on both the old and new segment bases.

  1. ARestate prior-year segment information to reflect the new structure unless the information is unavailable and the cost of developing it is excessive, in which case disclose current-period data under both basesCorrect
  2. BLeave prior-year segment information unchanged and give no further disclosure
  3. CRestate prior-year information only if Online was more than 10% of revenue
  4. DPresent the change as a change in accounting policy applied prospectively only

Explanation

When the internal structure changes so that segment composition changes, IFRS 8 requires comparatives to be restated unless the information is unavailable and the cost is excessive. If not restated, the entity must disclose current-period segment data on both the old and new bases. Leaving comparatives unchanged without disclosure is not permitted.

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