On October 23rd, 2014, we updated our
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Tests to recognize a segment If the segment has: 10% or more of combined revenue 10% or more of combined profit or loss 10% or more of combined assets If not any of the above but management wants a segment to be reported If a segment was reported last year does not satisfy the criteria this year- include the segment If a segment is reported this year but was not present last year - include it for previous year’s comparison
Total threshold If after segmentation, total segmental revenue, operating costs, assets, liabilities do not reach 75% each of the company total, then additional segments should be reported to reach the 75% level. As a reconciling item, group all other segments.
Disclosures 1 Disclose the following segmental information:
Reconcile all the above to the totals on the financial statements
Disclosures 2 Further segmental disclosures will be as follows:
Revenue from customers
Inter departmental revenues
Depreciation and amortization
Other material items (as per paragraph 97 of IAS 1)
Equity method of accounting of associates and joint ventures (amount of investments)
Other non cash items
Additions to fixed assets (non financial instruments).
Allocate all assets, liabilities, profit / losses on a reasonable basis
Please ensure consistency
As an explanation as to how we have measured a segment, disclose the basis of accounting (such as accrual basis)
Explain if there is any difference of measurements between the segments and the company. These differences could be for accounting policies, centrally incurred costs etc.
Reconciliations There should be reconciliations between segmental totals and the company totals for the following: Revenue Net profit (before tax or discontinued operations) Assets Liabilities Material items
Re-statement of information If the company structure changes then restate the earlier periods Following a change, disclose whether earlier information is restated If earlier information is not restated, then disclose the current segment information in the old and new format. This information should be provided unless the information is not available or the cost to produce it is prohibitive.
If information is not provided segment-wise then disclose revenue per product
Disclose revenue from external customers separating between the country of domicile and foreign countries (if substantial)
The extent of reliance on major customers (such as if 10% of revenue is earned from one customer)
For group companies under common control, consider as one customer.
Effective date and application
The standard is applicable effective 1st January 2009
Segmental information is required for interim financial statements also.