IFRS 8 OPERATING SEGMENTED
> in the financial statement recorded all the banches under the company revene and expens
users needed to make separate disclores each branch 9 revenue and expene of each bra
known as operating segmented
1 ) Definition (Operating Segment)
. > An operating segment is a component of an entity:
- discreet financial information is available
- that engages buiness activites
- whose results are regularly reviewd by the chief operating decsion maker
This means that the operating segments disclosed in the financial statements should be the sam
Aggregation
> Two or more operating segments can be reported as a single operating
segment provided that they have similar economic characteristics,
> the product and servce they sell
> production process
> types of customers
> distribution methods
in accrdacne with IFRS 8 operating segmennetd the agregration are through when the to or m
operating segmented could maeke single operating segmented ieven if the they have provide
similar characterstics they similier wold be
> the product and serive they sell
> producduction process
> distibutio method
> tyes of customers
eventhough they sell their product thorugh online nd offline store but theire product are same
pricing difreence are diffrecnt this means that the their profit margin and the prciing stratregy
bacasue the of the online purchase are cheap as compeare to offline ane and alsoe the proces
from all the resut abiove thise could not be agrigated
Reportable segment (Quantitative Thresholds
> Once operating segments have been aggregated, IFRS 8 says that an entity
will disclose those that meet one of the following quantitative thresholds
- its revenue from internal and ext ernal sales is ten per cent or more of
the total revenue of all segments ( contribute 10% of the total revenue from each
segment
> its assets are ten per cent or more of the total assets of all segments
> its profit or loss is ten per cent or more of the greater, in absolute
amount, of:
o the combined profit of all the profit-making segments
o the combined loss of all the loss-making segments.
Other segments should be disclosed so that at least 75% of external revenue is reported.
> if the totoal external revenue of the qualifed reported segments below the 75% of the total
will take non qualifed segment to meet th external recenue
europe
south east asia
north america
central america
total profit if all segmented
total loss of all segmenteds
take which is greater( here profit )
so 10% of greater
total external revenue
75% of external revneu
qualifeed seperaete segment
europe
south asia
north america
if the total qualfed external revenue o is 730 ( below the 75% external total revenue )
take america to meet external so total 730+30 =760
disclosures
> For each reportable segment an entity should report:
> proft and loss
> total assets
> total liabilites
y revene and expense but some cases
expene of each brannch thses segmented
nts should be the same as those disclosed and reviewed in internal management reports.
gh when the to or more
e they have provide
e product are same and
the prciing stratregy are different
and alsoe the process are diffrectn
ue is reported.
the 75% of the total external reecnue
10% of more of 10% of more of 10% of more of
revenue assets greater of P/L
yes
yes yes yes
yes yes yes
165
-10 of
16.5
1000
750
200
300
460
960
otal revenue )
