This document outlines the requirements for operating/reporting segments under IFRS 8. Key points include: 1) Operating segments are components of a business for which separate financial information is available and regularly reviewed by chief decision makers. 2) Segments are typically defined based on products, services, regions, or major customers. 3) Similar segments can be combined if they have similar economic characteristics, products/services, customers, distribution, or regulatory environments. 4) A segment must constitute over 10% of certain financial statement items or be reviewed by management to qualify for separate reporting.

1. Operating Segments – IFRS 8Effective date 1st January 2009

2. ObjectiveThe reader of financial statements should understand the nature and financial effects of various activities of the company.

3. What are Operating/Reporting segments? These are components of a business

4. Separate financial information should be available for these componentsMore features on segmentsA segment depends on internal management reporting pattern

5. Segments are reported in terms of products, services, regions, major customers etc.

6. The chief decision makers review segments for performance and allocation of funds.Similar segmentsWhen segments are similar then we can combine two or more segments into one segment

7. Such similarities should be in terms of

8. Products

9. Services

10. Customers

11. Distribution process

12. Regulatory environment (Banking, Insurance etc)Tests to recognize a segmentIf the segment has:10% or more of combined revenue10% or more of combined profit or loss10% or more of combined assetsIf not any of the above but management wants a segment to be reportedIf a segment was reported last year does not satisfy the criteria this year- include the segmentIf a segment is reported this year but was not present last year - include it for previous year’s comparison

13. Total thresholdIf 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.

14. Disclosures 1Disclose the following segmental information:Operating revenue