Presentation and Disclosure in Financial reporting

Case 1:
The following financial data contains Apple Inc. revenue between 2015 - 2023 from different regions
and ASTRA International income, financial position, ratio analysis and other information for the years
2018 and 2022. Estimate the significant reportable segments.

Apple Inc. revenue (2015-2023).

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ASTRA International income, financial position, ratio analysis and other information for the years 2018
and 2022.

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Answer :

Apple’s significant reportable segments:

Segments 2015 2016 2017 2018 2019 2020 2021 2022 2023

Americas 93.8 86.6 96.6 112 116.9 124.5 153.3 169.6 162.5
Europe 50.3 49.8 54.9 62.4 60.2 68.6 89.3 95.1 94.2
China 58.7 48.5 51.6 51.9 43.6 40.3 68.3 74.2 72.5
Japan 15.7 16.9 15.3 21.7 21.5 21.4 28.4 25.9 24.2
Asia Pacific 15 13.6 14.1 17.4 17.8 19.6 26.3 29.3 29.6

Total 233.5 215.4 232.5 265.4 260 274.4 365.6 394.1 383

Significant 202.8 184.9 203.1 226.3 220.7 233.4 310.9 338.9 329.2

75% rule 175.125 161.55 174.375 199.05 195 205.8 274.2 295.575 287.25

The estimation of the significant reportable segment was done by putting the country as the
segments and then summing up each of the country’s revenue. The next step was to calculate the
10% of the total revenue, or better known as the 10% rule. After finding out the 10% of the total
revenue, we then determine which segments are not a significant revenue in that particular year. To
validate the significance of the other segments, we use 75% rules, which is to multiply the total
revenue that year to 75%. Then, sum up the significant revenue. The significance was valid if the
total significant revenue is more than the 75% of the total revenue.

In this case, after calculating and validating the significance of the segments, it shows that the
revenue from Asia-Pacific and Japan are not significant to Apple’s total revenue because it’s below
10% of the total revenue. And the significant revenue, which are from the Americas, Europe, and
China, are valid because the total of that revenue is more than 75% of the total revenue.

Astra’s significant reportable segments:

Segments Total Revenue Total Operating Profit Total Identifiable Asset

2018 Rp239,205 Rp27,372 Rp344,711

2019 Rp237,166 Rp26,621 Rp351,958

2020 Rp175,046 Rp18,571 Rp338,203

2021 Rp233,485 Rp25,586 Rp367,311

2022 Rp301,379 Rp40,420 Rp413,297

Total Rp1,186,281 Rp138,570 Rp1,815,480

Significant Rp1,186,281 Rp138,570 Rp1,815,480

75% Rule Rp889,711 Rp103,928 Rp1,361,610

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Based on Estimation of the significant reportable segments from ASTRA International if we divide it
into the segment of years it showed that all of the operation activities are significantly contributed
to ASTRA. This conclusion was taken after calculating the result of 10K Requirement and the 75% are
passed.

Case 2:
Carefully read through this auditor report [ https://www.aramco.com/-
/media/publications/corporate-reports/annual-reports/saudi-aramco-ara-2022-english.pdf (page
148-155)] and analyze different opinions of auditor about company’s going concern, matter of
emphasis, and lack of consistency in accounting in financial reporting.

Answer :

1. Going Concern Assumption:

- The auditor explicitly mentions their responsibility to assess the Group’s ability to continue as a
going concern. This assessment involves considering the Board of Directors' judgements, disclosures,
and the going concern basis of accounting.

- Opinion: Some may agree with the auditor’s assessment, given their independence and adherence
to auditing standards. Others might question the thoroughness of the assessment or raise concerns
about undisclosed factors that could affect the company’s ability to continue as a going concern.

2. Matters of Emphasis:

- The auditor identifies two key audit matters: assessment of the recoverability of goodwill and
brand recognized as part of an acquisition and accounting for a significant transaction involving gas
pipelines.

- Opinion: Stakeholders may appreciate the transparency provided by the auditor in highlighting
these key audit matters, as they represent significant areas of judgement and potential risk.
However, some might question what other potential areas of concern were not highlighted.

3. Lack of Consistency in Accounting:

- The auditor explains the accounting treatment for a significant transaction involving the sale of
a 49% equity interest in Aramco Gas Pipelines Company and the recognition of the upfront sale
proceed as a non-controlling interest

- Opinion: While the auditor provides a detailed explanation of the accounting treatment, some
stakeholders may question the consistency of this treatment with industry standards or previous
practices. They might seek further clarification on why alternative treatments were not considered.

Name : Aisyah Nuralam

NIM : 26123362