AASB 8 Identifies Five Factors That Are to Be Considered

question 58

True/False

AASB 8 identifies five factors that are to be considered in determining whether or not products and services are related for the purposes of defining a business segment.It further specifies that the products and services included in a business segment must be similar with respect to all these factors.

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Definitions:

EBIT

Stands for Earnings Before Interest and Taxes; it's a financial metric that calculates a company's profitability by excluding interest and income tax expenses.

Debt

Money that is owed or due to be paid to someone else, often as a result of borrowing funds or purchasing goods and services on credit.

Fixed Costs

These are expenses that do not change with the level of goods or services produced by the business within a certain range of activity or over a certain period.

Break-Even

The point at which total costs and total revenues are equal, leading to no net loss or gain.