Operating segments

Question 1

IFRS 8 why

Answer 1

FS can often be highly aggregated and limit use of users

Only compulsory standard for listed companies

Question 2

Operating segment definition

Answer 2

A component of an entity:
That engages in business activities from which it may ear revenues and incur expenses;
Whose operating results are regularly reviewed by the entity’s chief operating decision maker, to make decisions about resources and assess performance:
For which discrete financial information is available

Question 3

Reportable segments criteria

Answer 3

If any of the below:
Revenue = 10% or more of total revenue
Reported profit/loss is = 10% or more of total
Assets = 10% or more of total assets

All segments should be reported until at least 75% of the entity’s external revenue has been disclosed

If a segment does not meet the above but management believe it would be useful to users maybe reported separately

Question 4

Consolidation of reporting segments

Answer 4

Two or more segments may be aggregated if they have similar economic characteristics: 
All of the below.
Nature or product/production 
Type of customer 
Distribution 
Nature of regulatory environment

Question 5

Disclosures

Answer 5

Must disclose:
Factors used to identify segments
Types of products it segments derives revenue
Each segments financial info
Geographic info
External revenue
Any reliance on major customers (over 10% of sales)