Integrated Sustainability and Financial Reporting †MyAssignmenthelp

Question: Discuss about the Integrated Sustainability and Financial Reporting. Answer: Introduction: According to Aleksanyan and Danbolt (2015), external segment reporting is geographically-based, while the internal segment reporting is industry-based or product-line based. According to AASB 8, the components of a business organisation includes engagement in business activities, review of operating results on the part of the chief decision-maker and availability of discrete financial information. The segmental expenses of a business organisation consist of the following: Inter-segmental transactions in relation to result from operational activities Inter-segmental transactions that are attributable directly or allocable to a segment reasonably As laid out by Cormier, Magnan and Demaria (2016), the reportable segments of an organisation comprise of the business and geographical segments, for which maximum portion of the revenue is made through sale to the external customers and they include the following as well: Transaction with the other segments is above 10% of the overall revenue Segment result is above 10% of the combined outcome of all segments Assets are above 10% or greater of the overall assets of the segments The accounting policies related to segment reporting would be identical with those utilised in the consolidated financial statements. In cases, two segments jointly use the same asset or additional segments are allocable to segments, it is necessary to allocate the associated revenues and expenses (Aasb.gov.au 2017). According to AASB 10, the primary goal is to formulate doctrines for presenting and preparing consolidated financial statements, when an organisation is the controller of a single or more entities (Aasb.gov.au 2017). The reconciliation schedules need to be depicted in the annual report to describe the variation between the segment amounts and totals of consolidation. The reconciliations would include the revenue related to reportable segment to consolidated revenue and the profit and loss of reportable segment to the consolidated income before taxes. The second reconciliation further includes inter-segmental revenues, expenditures along with allocated or common costs. In addition, further reconciliations take into consideration the assets of reportable segment to consolidated assets like corporate assets and in case; there is disclosure of other significant items, the segment amounts need to be reconciled with the consolidated amounts. Hence, based on the above discussion, it could be stated that both segment reporting and consolidated accounting are needed in the same financial report of an organisation, as it helps in authenticating the quality of the enterprise-wide disclosures. In addition, it provides the investors and other associated stakeholders about the true and fair financial position and performance of the concerned organisation. Based on the annual report of HIG, it could be stated that the management of the organisation takes into account the business from a perspective of project categorisation and four reportable segments have been identified. These reportable segments include evaluation or exploration, Freida, Ramu and Corporate. The corporate comprises of the other business activities of the organisation at offices held in Brisbane and PNG (Frias?Aceituno, Rodrguez?Ariza and Garcia?Snchez 2014). Consolidated accounting results: The consolidated profit and loss account is prepared in accordance with the Papua New Guinea Companies Act 1997 and it conforms to the International Financial Reporting Standards (IFRS). The organisation uses the historical cost method to develop the financial statements. The same conventional method is used as well to develop the reportable segment results. From the above two figures, it could be clearly observed that the overall amount of each reportable segment matches with the overall consolidated group amounts. No difference in the amounts of the two depicted segments could be found out because the organisation has used the identical accounting estimates for both types of reporting. However, HIG has reconciled the net gain (loss) after tax to cash flow from the overall operating activities. This has been depicted below in the form of a table as follows: The above table helps in depicting the net loss suffered on the part of the organisation for both the consolidated group and the holding organisation. The reconciliation schedules have been depicted in the annual report to describe the variation between the segment amounts and totals of consolidation. The reconciliation includes the net income related to reportable segment to consolidated revenue and the profit and loss of reportable segment to the consolidated income before taxes. In cases, two segments jointly use the same asset or additional segments are allocable to segments, it is necessary to allocate the associated revenues and expenses (Nichols, Street and Tarca 2013). In this case, HIG has allocated the related expenses and revenues, since two segments are jointly involved in using the same asset. References: Aasb.gov.au. (2017). [online] Available at: https://www.aasb.gov.au/admin/file/content105/c9/AASB8_08-15_COMPnov15_01-16.pdf [Accessed 2 Oct. 2017]. Aasb.gov.au. (2017). [online] Available at: https://www.aasb.gov.au/admin/file/content105/c9/AASB10_08-11.pdf [Accessed 2 Oct. 2017]. Aleksanyan, M. and Danbolt, J., 2015. Segment reporting: Is IFRS 8 really better?.Accounting in Europe,12(1), pp.37-60. Cormier, D., Magnan, M. and Demaria, S., 2016. A Look at EBITDA Reporting and Market.Cahier de recherche, p.02. Frias?Aceituno, J.V., Rodrguez?Ariza, L. and Garcia?Snchez, I.M., 2014. Explanatory factors of integrated sustainability and financial reporting.Business strategy and the environment,23(1), pp.56-72. Nichols, N.B., Street, D.L. and Tarca, A., 2013. The impact of segment reporting under the IFRS 8 and SFAS 131 management approach: A research review.Journal of International Financial Management Accounting,24(3), pp.261-312.