Financial Reporting: Segmental Reporting & Disclosure Analysis Report

This report examines segmental reporting and disclosure within financial reporting, focusing on the application of AASB 8 and IFRS 8. It explores how entities operate at different levels (product, service, geography) and how these segments generate revenue, impacting investors' decisions. The report highlights the management's crucial role in providing segment information, emphasizing their responsibility in data analysis, decision-making, and disclosure. It analyzes the management approach to segmental reporting, including potential implications for competitor information and the importance of ethical considerations. The report uses Highlands Pacific Limited's 2016 annual report as a case study, illustrating how the company discloses its segments (exploration, evaluation, industry developments) and meets segmental requirements. The analysis covers key aspects such as segment activities, management reports, risk analysis, and the company's compliance with financial reporting standards. The report references key academic sources and industry publications to support its claims and analysis.

FINANCIAL REPORTING
Segmental Reporting & Disclosure
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Part 1;
Ideally, entities are seen to operate and conduct business at different levels either
product wise, service wise, clientele, legally or even geographically. At all these levels, of
course, there exist activities that generate revenue or that are seen to reward the investors at a
particular period. It is therefore rightfully for the users of the information to get informed on
the decisions available, risk assessment exercise and finally previous firm performance
analysis for their best interest and that of the company Crawford(2012.Pg 52)
ASSB 114 and 8 has set regulations and guidelines on how the latter expectations of
investors should be addressed regarding the segments approach in place. Segments in a firm
may likewise be referred to as business unit or departments that are the cash generating in
nature.
Any cash-generating unit is expected to be held in charge by persons who work on
behalf of the investors for the sole purpose of operational control with an eye on revenue
generation and these persons are termed to be part of the management since they analyse data
and present activities happenings and scenarios while delivering key decisions in the
segments. The management is therefore soberly expected to outline all the information and
measures considered in decision making. This should range from operations, financials and
finally management through dialogue and both statistical and theoretical analysis.
At the segmental level, the management reliance is high since he forms the
informational basis of how the business is being run hence setting means of assessing
business performance. We can further state that all segment disclosure’s present in a firm
through one way or the other it has its roots to the management information available
concerning the segments at the time of reporting. The management is therefore expected to be
more cautious and responsible on all the matters relating to segments since they form the
basis of garbage in/garbage out. Management segmental adoption approach is vital since all

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the parties within individual interest and that of the business use the information while
reporting and disclosing segmental reports.
This approach may or may not result in too much private information disclosure to
competitors depending on individual ethics and professionalism Deegan(2012.Pg. 30). The
access level of information according to management is at time unquestionable thus limited
to their discretion. It is from this that he can maliciously and unlawful share the information
since no one monitors or regulates what they ought to disclose and to who. However, this is
only applicable to persons of management whose ethics and integrity is compromised
Bugeja(2015.Pg 320). Likewise, it may not disclose too much info to the competitor but only
to the extent in which the management agrees and comply with ethics and professionalism
rules on the share of information and secrecy that this applies. Generally, individual
management persons’ intention and professional will is what dictates on the act of insider
information and its control Aleksanyan (2015.Pg 50).
Part 2;
Highlands Pacific Limited 2016 annual reports inform of the group segments
activities to be that of exploring, evaluating and that of industry developments and this is
conducted through exploration and evaluation at segments Frieda where copper and gold
activities take place, Ramu dealing with nickel cobalt and Star mountain exploration of gold.
Highlands’s management is seen to report the segments in the note number 21 of notes to
financial statements. The management has further outlined the segment units in the statement
of significant accounting policies summary (c).The director in the summary report is seen to
give over view of events that happened during the year and more so on the excellent
progress of star mountain copper-gold segment and possible factors towards it, likewise we
are able to be informed by management of April accident that occurred and the next course of
action of shutting down that was taken by management Lantto(2007.Pg 23).They further

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inform on risks analysis and announcement of the next stage of exploration at Sewa Bay.
Generally the latter is just sample of management approach information wise on segments
Kang(2013.Pg 240)
Highland Pacific Ltd Company 2016 annual report has met all segmental
requirements while reporting and disclosure as outlined in AASB 8 and IFRS 8 at the point of
reporting. All explanation that is deemed importance for decision making has been disclosed
in notes and in the summary policies.

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References
Aleksanyan, M. and Danbolt, J., 2015. Segment reporting: Is IFRS 8 really better?.
Accounting in Europe, 12(1), pp.37-60.
Bugeja, M., Czernkowski, R. and Moran, D., 2015. The impact of the management approach
on segment reporting. Journal of Business Finance & Accounting, 42(3-4), pp.310-366.
Crawford, L., Crawford, L., Extance, H., Helliar, C. and Power, D., 2012. Operating
segments: The usefulness of IFRS 8. ICAS.
Deegan, C., 2012. Australian financial accounting. McGraw-Hill Education Australia.
Kang, H. and Gray, S.J., 2013. Segment reporting practices in Australia: Has IFRS 8 made a
difference?. Australian Accounting Review, 23(3), pp.232-243.
Lantto, A.M., 2007. Does IFRS improve the usefulness of accounting information in a code-
law country?.