You are reviewing the financial statements of Carrie's Climbing and Canyoneering (CCC), a publicly traded entity that reports financial information using IFRS. CCC has two plants. One is located in Düsseldorf and manufactures canyoneering GPS systems. CCC also has a plant located about 50 kilometers away in Cologne that casts climbing karabiners and weaves nylon rope. You correctly suspect that these are separate operating segments.

Question

Quizplus · Accepted Answer

Under IFRS 8, operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Given the distinct nature of the products (GPS systems vs. climbing gear) and potentially different production processes and markets, it's reasonable to consider the plants in Düsseldorf and Cologne as separate operating segments.

You Are Reviewing the Financial Statements of Carrie's Climbing and Canyoneering