AN ASSESSMENT OF OPERATING SEGMENT DISCLOSURE PRACTICES OF PUBLICLY-LISTED COMPANIES IN THE PHILIPPINE INFORMATION TECHNOLOGY SECTOR

AN ASSESSMENT OF OPERATING SEGMENT DISCLOSURE PRACTICES OF PUBLICLY-LISTED COMPANIES IN THE PHILIPPINE INFORMATION TECHNOLOGY SECTOR

Written by:
Ms. Herminigilda E. Salendrez
Department of Accountancy
Ramon V. Del Rosario College of Business
DLSU-Manila

Abstract

Without a doubt, global technology ecosystems are becoming increasingly interconnected. Consider, for example, a mobile app developed in Silicon Valley, with its backend infrastructure hosted on cloud servers in Germany, user interface design outsourced to a team in India, and quality assurance testing performed by specialists in Vietnam. This illustrates how the IT industry offers vast opportunities for international collaboration and investment. Because of the business operations across borders, accounting standard setters prescribed that an entity discloses information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environment in which it operates. The entity should provide information used by the management that will allow users to understand the entity’s main activities and the location of those activities. Disclosure of this relevant information will help build transparency with stakeholders. Disclosures are designed to assist outside users of financial information to make investments in the business. This study aims to show the outcome of examining publicly listed companies in the information technology (IT) company’s operating segment disclosure practices regarding their compliance with the financial reporting requirement embodied in the International Financial Reporting Standard (IFRS) 8, Operating Segments. Moreover, the study aims to generate recommendations for various stakeholders. It also seeks to contribute to the knowledge base of the academe.

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