The component of an entity

Learning objectives

• Identify a component of an entity: operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes.L1, L2, L3, L4

Normative references

• IFRS 5 §31Component of an entity: operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• Under IFRS 5, what is a component of an entity?L1
• The Delmar group has three divisions: 'Beverages', which has its own plants, sales teams, management accounting and cash; 'Canned goods', integrated in the same organisation as the rest of the group; and a central IT department serving the whole group. Which one can be a component?L3