The document discusses questions regarding interim financial reporting and operating segment disclosure requirements under IFRS for Disclosure Plc, a Nigerian company preparing to adopt IFRS. For interim financial reporting, the company can prepare interim condensed financial statements under IAS 34 for 2012 quarters but must include minimum information such as significant events and transactions. For a restructuring program, a provision for severance costs of $48 million should be recognized. Regarding operating segments, additional information may be required beyond what is in the internal report, such as a reconciliation of segment amounts to consolidated amounts and descriptions of segment measurement policies. Goodwill impairment testing can use the reported segments if they reflect how goodwill is monitored.

1. Financial Statements – Disclosures (Interim Financial Reporting &
Operating Segments)
CASE STUDY
Disclosure Plc (D’Plc) is a diversified conglomerate listed on the Nigerian Stock Exchange. It currently
prepares its financial statements in accordance with Nigerian GAAP. Ahead of its first annual IFRS
financial statements for the year ending 31 December 2012, the company wishes to publish its quarterly
accounts for that year to meet IFRS requirements.
Please work in your table groups to prepare answers to these questions.
First, spend about 10 minutes discussing the questions. Appoint a spokesperson to discuss your thoughts
with the rest of the group after 20 minutes.
Question 1 – Interim reporting
(a) Is the company right to assume IFRS requires its quarterly accounts for 2012 to be prepared in
accordance with IFRS? If yes, why? Otherwise, advise management appropriately.
(b) Can interim condensed financial information in accordance with IFRS be prepared for the three interim
quarters in 2012, although D’Plc has never prepared financial statements for a full year in accordance
with IFRS? What is the minimum information required by IAS 34?
(c) In order to improve profitability of its Food business, management is considering a restructuring
programme and has commenced dialogue with the employee union. This process is to be completed
by the end of 2012, by which time a new brand will also be launched. Total severance pay is projected
to be N48million.
The FD is concerned about how to book this in his 2012 financial statements, particularly the quarterly
accounts. Please advise him.
(d) What disclosure information would you suggest to management of D’Plc to start considering ahead of
its first interim IFRS financial statements come 2012?
Question 2 – Operating segments
An extract from the summary page of the new internal reporting pack provided to the CEO is given below.
D’Plc management intends to report separately only the segments highlighted on the summary page.
High end
Food
Food Total
Food
Electronics Household Total
Home
Clothes Speciality
N'bn N'bn N'bn N'bn N'bn N'bn N'bn N'bn
Revenue 136 426 562 83 112 195 368 61
Gross Margin 11% 4% 6% 34% 48% 42% 68% 46%
Net profit 11 11 22 19 41 60 190 19
Capital additions 18 93 111 8 10 18 37 4
Goodwill allocation 90 34 58 12
(a) Do you agree with the management’s assessment of the segments that should be reported
separately?
(b) Will the adoption of IFRS 8 have an impact on the goodwill impairment testing process?
(c) Can the group assess goodwill for impairment using the segments it expects to report separately?
(d) Is the segment information above sufficient to meet the requirements of IFRS 8 for segment reporting
in the IFRS financial statements of D’Plc? What additional information is required, if not?
Total time (plus feedback): 40 minutes.
ICAN IFRS Certification Technical Training Programme
Financial Statements – Disclosures (Interim Financial Reporting & Operating Segments)
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