What is a segment report?

The segment message is the practice of decomposing accounts in the annual report for detailed activity in the Details section of the company. In many countries, the accounting rules mean that this must be done where the company can clearly identify sections of a certain size. The intention is to give investors a better overview of how the company is operated and on any potential problem areas. These are rules and principles agreed by international authorities in order to facilitate comparison of the performance of companies in different countries. The rules for segment reporting appear in the IFRS number 8 statement, first released in 2006 and have been updated in several points since then. In the United States, these rules build and replace previous domestic rules known as a statement on financial accounting standards number 131. The first is if they make up 10% of the multiple total income. The second is if its operating profit for TVORoma 10% or more of the company's total operating profit; This does not include the general expenditure of a company that cannot be precisely assigned to a specific area of ​​the company. The third situation is if the segment assets make up 10% or more of the total assets of business.

There are some limitations to these segment reporting requirements. One of them is that the company should generally describe in detail up to 10 different segments in its annual report, even in a rare situation where more than 10 segments meet the qualification limits. In this situation, a total of the 10 largest segments should be listed.

The other rule is that all segments that are listed should join to form at least 75% of the company's total revenue. If this is not the case, it must be more segmental, even if they would not be unqualified normally. Segments Report is not necessary if the Company acquires at least 90% of its income from one area belownobody that cannot be divided. There is also a rule that as soon as the segment is described in detail, it should usually be described in detail in the future years, even if it has fallen under qualification criteria.

For each detailed segment, the company should mention all the main relevant factors. These include government contracts, overseas business and main clients. The report should provide enough details that the strengths and weaknesses of the segment can evaluate investors.