Segment reporting

Question 1

What is segment reporting?

Answer 1

Segment reporting IFRS 8

It provides financial information regarding the financial position and performance of the key operating segments of a company.

Could be based on products or geographical areas.

Particularly applicable to large enterprises:

      i) that produce a diversified range of products
       and services.

     ii) have a number of business lines and     
       operations.

    iii)  Often operate in different geographical 
        areas or countries.

Question 2

Definition of IFRS 8?

Answer 2

Definition of IFRS 8:

1. Operating segment of a business entity from which it may earn revenues and incur expenses
2. regular review of resource allocations by CODM.
3. for which discrete financial information is available.

Question 3

What is the threshold of segment reporting and what must you identify when presenting segment reporting?

Answer 3

What is the threshold of segment reporting and what must you identify when presenting segment reporting?

You must:

1. Identifying Operating Segments
2. Reported revenue/profits (absolute amount of the reported)
3. Assets

The rule is to identify 75% from the overall sector

Question 4

To calculate the different operating segments, what must you do?

Answer 4

To calculate the different operating segments, what must you do?

You must identify:

1. More than 10% of overall gross revenue (including inter-segment sales).
2. The absolute amount of the segments reported profit or loss is 10% or more of the greater (in absolute amount) of :

0.10 x 1090 = 109 - see page 72 of handbook

3. • the combined reported profit of all segments that did not report a loss
4. • the combined reported loss of all segments that did not report a profit (More than 10% of the combined assts value).

Now refer to typed notes on segment reporting