IFRS 8, Operating Segments

International Financial Reporting Standards (IFRS)
International Accounting Standards (IAS)

U.S. GAAP

IFRS, IAS

Accounting Topics

International Financial Reporting Standard (IFRS) 8
Operating Segments

International Financial Reporting Standards (IFRS)

International Accounting Standards (IAS)

U.S. GAAP by Topic

International Financial Reporting Standard (IFRS) 8

IFRS 8

Operating Segments

Issued in November 2006: replaced IAS 14

Recent amendment: by IAS 1 revised in September 2007

What is an operating segment?
      --> a component of an entity with the following characteristics:

      (1) discrete financial information is available
      (2) engages in business activities (earns revenue, incurs expenses)
      (3) operating results are regularly reviewed
            --> to assess performance
            --> to make resource allocation decisions (to the segment)

Quantitative thresholds (10% Rule):

      (1) assets are 10% or more of the combined assets
      (2) revenue is 10% or more of the combined revenue
      (3) profit or loss (in absolute amount) is 10% or more of
           the greater of (3a) and (3b), in absolute amount:
            (3a) combined profit of all operating segments
                    --> that did not report a loss
            (3b) combined loss of all operating segments
                    --> that reported a loss

If an operating segment meets any of the quantitative thresholds,
--> information about the operating segment
--> is reported separately

75% Rule:

      If total external revenue (of reported segments) < 75% of entity's revenue
      --> additional segments are reported
      --> even if they do not meet 10% Rule

      until total external revenue (of reported segments) ≥ 75% of entity's revenue

Information to be disclosed:

      (1) general information
      (2) segment revenues, segment profit or loss,
            segment assets, segment liabilities, basis of measurement
      (3) reconciliations
           (of the segment totals of following items)
           to corresponding entity amounts:
           segment revenues, segment profit or loss,
           segment assets, segment liabilities, other material segment items

Entity-wide disclosures:
      (1) geographical areas
      (2) major customers
      (3) products and services

Geographical areas information:

      revenues from external customers in
      (1a) the entity's country of domicile
      (1b) all foreign countries in total

      non-current assets located in
      (1a) the entity's country of domicile
      (1b) all foreign countries in total

Major customers information:

      if revenues from a single external customer ≥ 10% of entity's revenue,
      disclose:
      (2a) total revenues from each of those customers
      (2b) segments reporting revenues from those customers

Products and services information:

      revenues from external customers for each
      (3a) product and service
      (3b) group of similar products and services

U.S. GAAP by Topic

Accounting Topics

Inventory Valuation Methods

Depreciation Methods

Revenue Recognition Principle

Accrual Basis vs. Cash Basis Accounting

Basics of Journal Entries

Ratios for Financial Statement Analysis

Overview of Financial Statements

	Wiley IFRS 2008: Interpretation and Application of International Accounting and Financial Reporting Standards 2008 by Barry J. Epstein and Eva K. Jermakowicz (Paperback - Mar 28, 2008) Paperback Edition Book & CD-Rom Edition
	Wiley GAAP 2008: Interpretation and Application of Generally Accepted Accounting Principles 2008 Paperback Edition Book & CD-Rom Edition
	Wiley CPA Exam Review 2008: 4 Volume Set 4 Volume Set