SEGMENT REPORTING group of executives such as the OS that do not meet any of the quantitative

board of directors or a management thresholds may be considered reportable

IFRS 8 (sa Philippines, PFRS 8) Operating committee. ) and separately disclosed on a voluntary
Segments  for which separate financial basis if management believes that
Core Principle: Segment Reporting is the information is available information about that segment would be
disclosure of certain financial information Identifying Operating Segments useful to the users of the FS.
about the products and services an entity Management Approach- OS are identified (**For Illustration, check Intacc 3- Valix
produces and the geographical areas in based on the components of the entity that (2019) page 257-258)
which an entity operates. The purpose of are considered to be important for internal
such disclosure is to enable investors and management reporting purposes. A Overall size test- 75% threshold
users to make better assessment of each component of entity that sells primarily or If the total external revenue reported by
business activity leading to the exclusively to other operating segment is operating segments constitutes less than
understanding of the performance of the included in the definition of an OS if the 75% of the entity's revenue, additional
entity as a whole. entity is manage in that way. operating segments must be identified as
reportable segments even if they do not
Scope: PFRS 8 shall apply to separate FS Note: IFRS has no longer using the “Risk meet the quantitative thresholds set out
of an entity or Consolidated FS of a group and Reward Approach” of identifying above until at least 75% of the entity's
with parent: operations by business segment and revenue is included in reportable segments
 Whose debt and equity instruments are geographical segment.
traded in the public market Aggregation of Segments
 That file or in the process of filing the REPORTABLE SEGMENTS Two or more operating segments may be
consolidated FS with SEC or other An entity shall report information about the aggregated into a single operating segment
regulatory org. for the purpose of issuing OS that meets any of the following if aggregation the segments have similar
any class of instruments in the public quantitative threshold: economic characteristics and the segment
market  its reported revenue, from both external share a majority of the following criteria:
customers and intersegment sales or A. Nature of product / service
OPERATING SEGMENTS (OS) transfers, is 10% or more of the B. Nature of production process
 Distinguishable component of an combined revenue, internal and C. Type or class of customers
entity that is engaged in business external, of all operating segments, or D. Marketing and Method or
activities which generate revenue  the absolute measure of its reported method used to distribute the
and incur expenses. Example, start profit or loss is 10% or more of the product
up operations may be operating greater, in absolute amount, of. E. The nature of the regulatory
segment before earning revenue. a. the combined reported profit of all environment, ex: banking,
 whose operating results are operating segments that did not insurance or public utility
reviewed regularly by the entity's report a loss and ***(For Illustration, check Intacc 3- Valix (2019)
chief operating decision maker to b. the combined reported loss of all page 259-260)
make decisions about resources to operating segments that reported a
be allocated to the segment and loss, Limitation the number of segments
assess its performance (the chief  or its assets are 10% or more of the There’s no precise limit that has been
operating decision maker could be combined assets of all operating determined but if the number of reportable
an individual, such as the chief segments. segments exceed 10, it is likely that the
executive officer or the chief information may become too detailed and
operating officer or it could be a consequently lose its usefulness.
 Maker or regularly reported to  Total of reportable segment’s profit or
Segment no longer reportable him: loss to entity’s profit or loss before and
If the management judges that an OS  Revenue from external after tax and Discounted operations
identified as a reportable segment in the customers  Total of reportable segment’s assets to
 “Internal” revenue entity’s assets
immediate preceding period is of
 Interest revenue  Total of reportable segment’s liabilities
continuing significance, info about the to entity’s liabilities
 Interest expense
segment continue to be reported  Total of reportable segment’s amounts
 Depreciation and amortization
separately in the current period even if it no  Material items of income and for every other material item of
longer meets any of the 10% quantitative expense information Disclosed to the
thresholds, for reportability.  Interest in P/L of associates and corresponding amount of the entity
joint venture ****** (For Illustration, check Intacc 3-
Segment becoming reportable  Income tax expense or income Valix (2019) page 264-266
If an OS is identified as reportable segment  Material non-cash items 4. Entity-wide Disclosures
in the current period in accordance w/ the  Provide an explanation of These are not at a segment level but at the
10% quantitative threshold, its data is measurement basis of segment entity level of all the segments
presented for comparative purposes shall profit or loss, segment assets and  Information about the products and
be restated to reflect the newly reportable segment liabilities for each services
segment even if the segment did not meet reportable segment:  Information about geographical
the 10% threshold in the prior period  Basis of accounting for transaction areas
between reportable segments  Revenue from external customers
OPERATING SEGMENTS:  Nature of differences between  Attributed to entity’s country
DISCLOSURES measurements of reportable
of domicile
segments’ P/L and entity’s P/L after
This can be classified into four categories: income tax + discounted operations
 Attributed to all foreign
1. General Information  Nature of differences between countries
 Factors used to identify measurements of reportable  Non-current assets
reportable segments segments’ assets and entity’s  Located in entity’s country of
 Judgements in applying assets domicile
aggregation criteria  Nature of differences between  Located in all foreign
 Types of products/services measurements of reportable countries
generating revenues segments’ liabilities and entity’s  Information about major customers
****(For example, check Intacc 3- liabilities  Report if revenue with single
Valix (2019) page 262)  Nature of any changes from prior
customer is 10% or more of
2. Information about Profit or Loss, periods in the measurement
methods to
the total revenue
Assets and Liabilities
 determine segment’s P/L and their
 Measurement of segment items
effects
equal to the measure reported to  Nature and effect of asymmetrical
the Chief Operating Decision allocations to reportable segments
Maker (CODM) ***** (For Illustration, check Intacc 3-
 Disclose separately the following Valix (2019) page 263)
amounts if it is included in items 3. Reconciliations
of segment profit or loss reported  Total of reportable segments’ revenue to
to Chief Operating Decision entity’s revenue