IFRS 8 requires the disclosure of certain key information such as an organization's major customers and geographic areas of operations. Why are these disclosures required?
A)To demonstrate that the chief operating decision-maker has made prudent decisions
B)To allow users to assess potential business risks
C)To provide sufficient information to creditors
D)To allow users to see that the poor performance of one segment is usually offset by the good performance of other segments

Question

Quizplus · Accepted Answer

These disclosures are required to allow users to assess potential business risks. By knowing the organization's major customers and geographic areas of operations, users can better understand the stability and diversification of the organization's revenue streams, as well as any potential risks associated with the concentration of customers or operations in certain areas. This information is important for investors and other users of financial statements in making informed decisions about the organization's future prospects.

IFRS 8 Requires the Disclosure of Certain Key Information Such