PART1 CHAPTER25: The adjustment is done in order to avoid double

PART1 CHAPTER25:
The adjustment is done in order to avoid double counting of revenue booking for a single transaction
and also to avoid recognition of unrealized gain
Operating Segment
AASB 8 “Operating Segment” requires an entity shall disclose all the valuable information in its
financial statement so it is easy for the users to analyse the financial effect which can crop to the
business in which it operates and to the environment in which it functions.All the general
information and information about any profit or loss or any specified revenue or expenses ,segment
assets and any segment liability all disclosures are required to be given in order to enable the users
to interpret the financial statement easily.
Related Party Disclosure
Under AASB 124 “Related Party Disclosure” it says that related party relationship is very common
feature in an entity .Many a times in a corporate carry there activity through its subsidiary, joint
venture or associates. In this case the entity has the capacity to affect the financial policies.
Related party relationship also affects the profit and loss and financial statement of an entity.
Sometimes related party enter into such transaction at such price which it might not enter into with
another party. For instance an entity might be selling its goods at cost price to its parent or
subsidiary company but it might not be possible for the entity to sell at the same price to another
customer.
The financial position of the entity is affected by related part relationship and transaction. As if the
related party transaction does not occur than also through the related party relationship, financial
statement of the company might be affected. The small existence of mere relationship is only suffice
to affect the transaction of an entity. For instance a subsidiary might bring to end his relationship
with trading partner on his acquisition by another company. Another instance like because of
significant influence by another party, the subsidiary company might abstain himself from working.
For all of the above reasons, entity’s transaction knowledge, balance outstanding, and the
relationship with related party are all the risk and opportunities of a related party transactions.