If a company operates in more than one significant segment they must disclose segmented information in the notes of the financial statements.What is the purpose of the segmented information?
A)To aid competitors in understanding the business.
B)To aid the user in assessing the overall risk of the company.
C)To aid in the preparation of consolidated financial statements.
D)To aid the user in assessing the liquidity of the company.

Question

Quizplus · Accepted Answer

The purpose of segmented information is to help the user assess the overall risk of the company by providing information on the financial performance of different segments of the business. It allows for a more detailed analysis of the company's operations and the potential risks and opportunities associated with each segment. The other options listed are not valid reasons for disclosing segmented information.

If a Company Operates in More Than One Significant Segment