Section 2600: Operating Segments
International Financial Reporting Standard 8
Operating Segments
1. History
IAS 14, Reporting Financial Information by Segment, August 1981
IAS 14, Segment Reporting, August 1997
In 2006, IFRS 8 replaced IAS 14
IFRS 8, Operating Segments, issued in November 2006
[U.S. GAAP Codification Topic]
280 Segment reporting
2. Operating Segment, IFRS 8.5
A component of an entity that satisfies (1), (2), (3)
(1) engages in business activities
(2) operating results are regularly reviewed
(3) discrete financial information is available
3. Aggregation Criteria, IFRS 8.12
Operating Segments can be aggregated
--> into a single operating segment
--> if they are similar in each of the following:
(1) nature or products and service
(2) nature of production processes
(3) type or class or customers
(4) methods of product distribution
(5) nature of regulatory environment (i.e. banking)
4. Reportable Segments, IFRS 8.11
Operating segments that meet any of the quantitative thresholds
Information is reported separately for each of reportable segments
5. Quantitative Thresholds, IFRS 8.13
Revenue is 10% or more of the combined revenue of all operating segments
Assets are 10% or more of the combined assets of all operating segments
Absolute amount of profit or loss is 10% or more of the greater of (1) and (2)
(1) absolute amount of combined loss of all operating segments that reported a loss
(2) absolute amount of combined profit of all operating segments that did not report a loss
6. 75% Rule, IFRS 8.15
If total external revenue is less than 75% of entity's revenue,
--> additional operating segments become reportable segments
--> even if they do not meet the quantitative thresholds
--> until reportable segments include
--> 75% or more of revenue reported by operating segments
7. Disclosure
The following information is disclosed for each period:
(1) General information:
--> types of products and services
(2) Information about segment:
--> revenues, expenses, profit or loss, assets, liabilities
(3) Reconciliations to corresponding entity amounts:
--> totals of segment revenues, profit or loss, assets, liabilities
8. Entity-wide Disclosures, IFRS 8.31, 32, 33, 34
The following information is provided
--> if it is not provided by segment reports
(1) Information about products and services
(2) Information about geographical areas
(3) Information about major customers
9. Products and Services
Revenues from external customers are reported, for each of (1) or (2):
(1) product and service
(2) group of similar products and services
10. Geographical Areas
(1) entity's country of domicile
(2) all countries in total
(3) individual foreign country, if material
11. Information to be reported by geographical areas
Revenues from external customers
Non-current assets other than
--> financial instruments, deferred tax assets,
--> post-employment benefit assets, rights from insurance contracts
12. Major Customers
If revenue from a single external customer is
--> 10% or more of the entity's revenue
Disclose (1) and (2)
(1) total amount of revenue from each of such customers
(2) segments reporting the revenues
13. The following is not required for disclosure
(1) identity of a customer
(2) segment revenue from that customer
| 
Index of IFRS Financial Reporting Textbook
