Segmental reporting in Singapore

• Main Authors: Goh, Eddie Guan Chua, Jong, Voon Hoo, Kwong, Choong Kuen
• Other Authors: Tan, Khoon Eng
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Accounting
• Online Access: http://hdl.handle.net/10356/51954
• Institution: Nanyang Technological University

This study was conducted primarily to examine the cost and benefit of segmental reporting and the necessity for it to remain mandatory by looking at the issue from both the perspective of the preparers of the financial statements and the end-users of these statements and recommend ways to improve the reporting wherever necessary. The data collected from the questionnaires were analysed and the results generated led us to conclude that segmental reporting is useful and should remain mandatory. Based on our findings, we have identified two areas for further improvements. The two areas are (i) the comparability of segmental reports and (ii) the disclosure requirement of Statement ofAccountingStandard 23 (SAS 23). To improve the comparability of segmental reports, we recommend the standard setter to prescribe net realisable value method and market-price-based transfer pricing as the benchmark treatment in the case ofjoint cost allocation and transfer price respectively. We have also suggested for the mandatory disclosure of the basis of joint cost allocation to improve the disclosure requirement. Last but not least, we have found that the matrix form of presenting segmental reports (as shown in Chapter Six) can be used to enhance decision making and thus improve the disclosure requirement of SAS 23. Hence we recommend the standard setters to make this form of presentation a mandatory disclosure requirement.