Comprehensive Problem on Operating Segment:

In the Super Food Limited example, the information provided to the CODM is based on the same accounting policies as the financial
statements (ie. IFRS) with the following exceptions:

 Segment profit or loss before tax excludes any expenses associated with share based payments (P990) and other management
bonuses (P1,489)
 Finance costs(P1,627), Finance revenue (785) and income taxes(P3,775) are managed on a group basis and are not allocated to any
segment
 Segment revenue of P902 and the related segment receivable of P2,114 for the publishing segment are recognized on shipment of
goods. In the consolidated financial statements, such revenue and receivables are recognized when the goods are delivered to the
retailer.
 Segment assets do not include deferred tax assets managed on a group basis
 Interest – bearing loans and borrowings, Mandatory redeemable preference shares, income tax payable and deferred tax liabilities are
managed on a group basis, and are not allocated to operating segments

Super Food Limited

Consolidated Profit and Loss Statement
For the year ended December 31, 200X

Sale of goods P 180,293

Rendering of services 59,388
Rental income 16,343
Revenue: 256,024
Cost of Sales ( 163,816)
Gross Profit 92,208
Finance revenue 785
Other income 1,585
Selling and distribution costs (14,775)
Administrative expenses (64,055)
Other expenses (1,088)
Finance costs (1,627)
Share of profit of associate 83
Profit before tax 13,116
Income tax expense for the year (3,775)
Profit for the year P 9,341

Super Food Limited

Consolidated Statement of Financial Position
December 31, 200X

Assets Liabilities and Shareholders’ Equity

Current assets Current liabilities
Cash and cash equivalents 22,628 Trade and other payables 17,841
Derivative financial instruments 153 Interest - bearing loans and borrowings 2,460
Trade and other receivables 39,873 Income tax payable 3,980
Inventories 33,875 Provisions 599
96,529 Other liabilities 13,627
38,507
Noncurrent assets Noncurrent liabilities
Property, plant and equipment 33,919 Interest - bearing loans and borrowings 15,078
Investment properties 10,893 Mandatory redeemable preference shares 2,778
Intangible assets 6,195 Provisions 5,100
Investment in associates 764 Employee benefits liability 2,544
Available for sale securities 9,992 Deferred tax liability 3,103
Deferred tax assets 383 28,603
62,146 Shareholders' Equity
Share capital 52,375
Retained earnings 39,190
91,565
Total Assets 158,675 Liabilities and Shareholders' Equity 158,675

1
The group is organized into eight segments based on their products and services. Management monitors the operating results of the eight
business segments for the purpose of making decisions about resources to be allocated and of assessing performance. Also, discrete
financial information is available for each business segments. Financial information for the year for the respective segments as provided to
the chief operating decision maker is as follows:

Revenues Profit before Depreciation &

Assets
Third party Intersegment tax amortization
Retail 129,842 6,887 52,647 2,609
Business direct catering services 29,694 7,000 4,000 22,000 410
Domestic direct catering services 29,694 465 716 23,145 409
Manufacturing 2,704 36,791 1,283 24,620 206
Cook book publishing 16,153 586 7,000
Magazine publishing 16,153 583 7,165
Mail order distribution of bakery products 16,343 4,000 1,642 11,915 92
Leasing of property 16,343 761 1,642 11,914 91
Total 256,926 49,017 17,339 160,406 3,817

Decline in FV Gain on Share of Investment

Capital
of investment disposal profit of in Liabilities
expenditure
property of PPE associate associate

Retail 341 8,579 14,839

Business direct catering services 83 764 604 4,891
Domestic direct catering services 603 4,892
Manufacturing 1,842 3,609
Cook book publishing 108 2,352
Magazine publishing 108 2,352
Mail order distribution of bakery products 3,388
Leasing of property 306 191 63 3,388
Total 306 532 83 764 11,907 39,711

Other information:

 Before proceeding with the 10% threshold test, the entity opt to aggregate business segments into one operating segment
 The cook book publishing and magazine publishing businesses have similar economic characteristics and meet all the criteria for
aggregation
 The business direct catering services and domestic direct catering services have similar economic characteristics and meet all the
criteria for aggregation
 Segment performance is evaluated based on segment profit before tax which in certain respects is measured differently from operating
profit or loss in the consolidated financial statements
 Sales between segments are made at prices that approximate market prices. There was no inter-segment profits to be eliminated
 Capital expenditure consists of additions of property, plant and equipment and intangible assets
 Geographic information:

Revenue Location of
from external non-current
customers assets
Philippines 75,123 21,339
France 30,476 11,544
United Kingdom 38,272 9,692
United states 62,349 6,469
Other countries 49,804 2,727

 Revenue from one customer amounted to P27,506 arising from sales by the catering and publishing segments.

Required:

1. Identify the reportable segments

2. Prepare the disclosure for the financial information of the operating segments
3. Prepare the disclosure for the reconciliation of financial information provided in operating segment note to information provided in the
financial statements
4. Prepare the entity-wide disclosures