Segmental reporting disclosures in South Africa : requirements versus needs
Segmental reporting (breaking down information in financial statements between different business activities and different geographical areas) is mandatory for certain companies in South Africa in terms of the disclosure requirements of AC 115. Such requirements are similar to those contained in other international accounting statements and include the disclosure of turnover, total assets, and operating profit for each industry and geographical segment within which a company operates. The users of financial statements need segmental information to assess the risk, profitability and return of a company, especially when various components of the company differ significantly in rates of growth, profitability and risk. This study investigates users' needs for segmental information and relates these needs to the requirements of AC 115.
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