Summary 
Developments, Key Differences & History 
Compared to IFRS 
Interpretations 
Rejection Notices 
Questions & Answers 
Articles 
AASB website 

• An operating segment is a component of an entity:
• That is involved in business activities from which it earns revenues and incurs expenses (including transactions with other components of the same entity)
 

• Whose operating results are regularly reviewed by the entity’s chief operating decision maker; and
 

• For which discrete financial information is available.
 

• An operating segment must be reported on in the notes of a financial report when individually or in aggregate (see next point regarding how operating segments are aggregated) it exceeds the following quantitative criteria: 
  
  • Internal and external revenue is 10% or more of the total revenue of all operating segments
   
  
  • The absolute amount of profit or loss is 10% or more of the greater of the total profit of all profit-making operating segments or total loss of all loss making operating segments
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  • Assets are 10% or more of total assets of operating segments
   
  
• Two or more operating segments may be aggregated if the segments have similar economic characteristics and the segments are similar in each of the following:
• Nature of products and services
 

• Nature of production services
 

• Type or class of customer for their products and services
 

• The methods used to distribute their products or provide their services; and 
  
• If applicable, the nature of the regulatory environment (e.g. public utilities).
 

• The reportable operating segments identified must contribute at least 75% of the entity’s total revenue. Therefore, some operating segments reported may not meet one of the three quantitative criteria.  
   
  
• The chief operating decision maker represents a function, not necessarily an individual person in a management role. The function is that of allocating resources and assessing the performance of an entity’s operating segments. For example, it may be a chief executive officer or the board

• Factors used to determine the reportable operating segments
 
 

• Types of products and services each reportable segment provides to earn revenue
 
 

• For each reportable operating segment:
• Profit or loss, total assets, interest revenue and interest expense
 

• Total liabilities, external revenues, internal revenues, depreciation and amortisation, material items of income and expense, interest in associates and joint ventures, income tax expense/income and other material non-cash items, if provided to the chief operating decision maker
 

• Since the information to be disclosed about each reportable operating segment is based on the information provided to the chief operating decision maker, the measurement of each item required to be disclosed is specific to each entity. Therefore, entities are required to disclose an explanation of how each type of item (e.g. revenue) disclosed is measured and provide reconciliations between the total of the reportable operating segments’:
• Revenues and the entity’s total revenue
 

• Profit or loss and the entity’s total profit or loss
 

• Assets and the entity’s total assets
 

• other items (e.g. liabilities) provided and the total entity’s equivalent item (e.g. the entity’s total liabilities)