Operating Segments Flashcards
1
Q
How is an operating segment defined?
A
Component of an entity which;
- engages in business activities from which it may earn revenue and incur expenses
- results are regularly reviewed by CODM
- for which discrete financial information is available
2
Q
What are the thresholds for a reportable segment?
A
- more than 10% of revenue (internal and external) or;
- more than 10% of Assets or;
- segments in profit (or if greater segments in loss)
Check if total external revenue of reportable segments if more than 75% of total revenue
3
Q
What is the criteria for aggregation?
A
Only if they have similar economics characteristics AND:
- the nature of products and services
- nature of production processes
- classes of customer
- distribution methods undies to provide the services
- if applicable, nature of regularity environment
