IFRS 8 Operating Segment

Question 1

An operating segment is defined as a component of an entity:

Answer 1

1. That engages in business activities from which it may earn revenues and incur expenses
2. Whose results are reviewed by the entity’s chief operating decision maker(s)
3. Discrete financial information available.

Question 2

Reporting thresholds

Answer 2

1. 10% quantitative threshold (ANY ONE)
   i. 10% Revenues (External and Internal)
   ii. 10% Profit or loss (whichever is higher)
   iii. 10% total assets
2. Reportable segment 75% rule
   i Segment sales should constitute at least 75% of the total sales to external parties while the remaining segments sales are classisifed as others
3. Aggregation criteria
   - With similar economic characteristics