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AASB 114 - Segment Reporting
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Summary 
Developments, Key Differences & History 
Compared to IFRS 
Interpretations 
Rejection Notices 
Questions & Answers 
Articles 
AASB website 

 
Currency of material 
This material was last updated in September 2008.  
 
Overview  
AASB 114 Segment Reporting is equivalent to IAS 14 of the same name as issued by the International Accounting Standards Board. The objective of AASB 114 is to establish principles for reporting financial information by segment. It is applicable for annual reporting periods beginning on or after 1 January 2005. AASB 8 Operating Segments was issued in February 2007 and supersedes AASB 114 effective from 1 January 2009. 
 
 
SUMMARY 
Main Requirements 
The main requirements of AASB 114 are: 
 
Application (paragraphs Aus1.1-Aus1.10)
  • AASB 114 does not apply to not-for-profit entities.
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  • AASB 114 applies to all for-profit reporting entities, although will not apply if AASB 8 has been early adopted.
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  • When parent and group financial statements are presented, the parent is not required to present segment information. If parent segment information is presented, it must be in accordance with AASB 114.
Definitions (paragraphs 8-25) 
Include business segment, geographical segment, reportable segment, segment revenue, segment expense, segment results, segment assets and segment liabilities. 
 
Identifying Reportable Segments (paragraphs 26-43)
  • Information about business and geographical segments must be reported based on the segments of the entity for which information is reported to the chief executive officer and the governing body.
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  • Identifying the business segments and geographical segments requires looking at the organisational structure and internal reporting system.
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  • Where internal segments are not geographical or products/service-based, then look to next lower level of internal segmentation to identify the segments.
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  • One basis of segmentation (business or geographical) is primary and the other secondary with the primary basis determined by the predominant source and nature of risks and rewards of the entity.
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  • Materiality guidance is provided to determine which segments are reportable if the majority of its revenues are from sales to external customers and it passes one of the 10% thresholds in relation segment revenues, segment assets or segment result.
Segment accounting policies (paragraphs 44-48)
  • Segment information must be prepared using the same accounting policies as the consolidated group or entity.
Disclosure (paragraphs 49-83)
  • The disclosure requirements for the primary reporting format include segment revenues, segment result, carrying amount of segment assets, segment liabilities, cost of non-current segment assets acquired during the period, depreciation and amortisation of segment assets and other segment non-cash expenses.
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  • The disclosure requirements for the secondary reporting format are considerably less than for the primary reporting format.
Appendices 
A – Segment definition decision tree 
B – Illustrative segment disclosures 
C – Summary of required disclosure 
 
 
The information provided is a brief summary of the requirements of this standard and is not intended to be used as a substitute for reading the standard itself nor does it attempt to provide any interpretative advice. To apply the standard to their particular circumstances readers are encouraged to read the text of the standard and, if necessary, seek professional advice from a Chartered Accountant or other suitably qualified professional. The Institute expressly disclaims all liability for any loss or damage arising from reliance upon any information or inaccurate statement made in this summary.