Yakub02
Banned
Operating segments IFRS 8 defines an operating segment as a component of an entity:
that engages in business activities from which it earns revenues and incurs expenses;
whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available.
Not every part of an entity is necessarily an operating segment. For example a corporate head office may not earn revenue and would not be an operating segment. The standard requires a segment to have its results reviewed by the chief operating decision maker.
The reason for this part of the definition of an operating segment is to ensure that an entity reports segments that are used by management of the entity to monitor the business
Aggregation of segments Two or more operating segments may be aggregated into a single operating segment if they have similar economic characteristics, and the segments are similar in each of the following respects:
The nature of the products and services;
The nature of the production process;
The type or class of customer for their products and services;
The methods used to distribute their products or provide their services; and
If applicable, the nature of the regulatory environment, for example, banking insurance or public utilities. Quantitative thresholds An entity must report separately information about an operating segment that meets any of the following quantitative thresholds:
that engages in business activities from which it earns revenues and incurs expenses;
whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and for which discrete financial information is available.
Not every part of an entity is necessarily an operating segment. For example a corporate head office may not earn revenue and would not be an operating segment. The standard requires a segment to have its results reviewed by the chief operating decision maker.
The reason for this part of the definition of an operating segment is to ensure that an entity reports segments that are used by management of the entity to monitor the business
Aggregation of segments Two or more operating segments may be aggregated into a single operating segment if they have similar economic characteristics, and the segments are similar in each of the following respects:
The nature of the products and services;
The nature of the production process;
The type or class of customer for their products and services;
The methods used to distribute their products or provide their services; and
If applicable, the nature of the regulatory environment, for example, banking insurance or public utilities. Quantitative thresholds An entity must report separately information about an operating segment that meets any of the following quantitative thresholds:
