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AASB 8 - Operating Segments - February 2007

Authoritative Version
AASB 8 Standards/Accounting & Auditing as made
This Accounting Standard requires entities to provide information about operating segments on a basis that reflects that provided to the chief operating decision maker for making judgments about segment performance and allocation of assets to operating segments.
Administered by: Treasury
General Comments: When applicable, this Standard supersedes AASB 114 - Segment Reporting (F2005B01193).
Exempt from sunsetting by the Legislative Instruments Regulations 2004 Sch 3 item 12
Registered 08 Mar 2007
Tabling HistoryDate
Tabled HR20-Mar-2007
Tabled Senate20-Mar-2007
Date of repeal 31 Dec 2015
Repealed by AASB 8 - Operating Segments - August 2015

Accounting Standard

AASB 8

February 2007

 

 

 

 

Operating Segments

 



Obtaining a Copy of this Accounting Standard

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COPYRIGHT

 

© 2007 Commonwealth of Australia

 

This AASB Standard contains International Accounting Standards Committee Foundation copyright material.  Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Administration Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.

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ISSN 1036-4803


CONTENTS

Preface

Comparison With International Pronouncements

Accounting Standard

AASB 8 Operating Segments

Paragraphs

Core Principle                                                                                                                1

Scope                                                                                                                         2–4

Operating Segments                                                                                              5–10

Reportable Segments                                                                                           11–19

Aggregation Criteria                                                                                                  12

Quantitative Thresholds                                                                                     13–19

Disclosure                                                                                                             20–24

General Information                                                                                                    22

Information about Profit or Loss, Assets and Liabilities                               23–24

Measurement                                                                                                        25–30

Reconciliations                                                                                                           28

Restatement of Previously Reported Information                                           29–30

Entity-Wide Disclosures                                                                                     31–34

Information about Products and Services                                                              32

Information about Geographical Areas                                                                   33

Information about Major Customers                                                                       34

Transition and Effective Date                                                                            35–36

 

Appendix:

A.  Defined Term                                                                                             Page 24

Deleted ifrs 8 text                                                                                 Page 25

 


implementation Guidance on ifrs 8

(available on the AASB website)                                                                                

BASIS FOR CONCLUSIONS ON IFRS 8
(available on the AASB website)                                                                                

 

Australian Accounting Standard AASB 8 Operating Segments is set out in paragraphs 1 ‑ 37 and Appendix A. All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  Terms defined in this Standard are in italics the first time they appear in the Standard.  AASB 8 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation and Application of Standards, which identifies the Australian Interpretations.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

 


Preface

Reasons for Issuing AASB 8

The Australian Accounting Standards Board (AASB) is implementing the Financial Reporting Council’s policy of adopting the Standards of the International Accounting Standards Board (IASB) for application to reporting periods beginning on or after 1 January 2005.  The AASB has decided it will continue to issue sector-neutral Standards, that is, Standards applicable to both for-profit and not-for-profit entities, including public sector entities.  The AASB has departed from this objective in respect of this Standard because the requirements are specific to for-profit reporting entities that have issued, or are in the process of issuing, debt or equity securities on a public market. 

Main Features of this Standard

Scope and Application

This Standard applies to for-profit entities whose debt or equity instruments are traded in a public market or that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market. AASB 114 applied to a broader range of for-profit entities, namely those that are for-profit reporting entities.

The Standard does not apply to not-for-profit entities, in common with AASB 114. 

The AASB decided that AASB 8 should have the same scope and application as IFRS 8.  In making its decision on the scope of IFRS 8 the IASB foreshadows, in its Basis for Conclusions on IFRS 8 (paragraphs BC 18-20), its intention to propose extending the scope of IFRS 8 to include entities that hold assets in a fiduciary capacity for a broad group of outsiders at the same time as it issues an exposure draft of its proposed IFRS for SMEs.

Application Date

This Standard is applicable to annual reporting periods beginning on or after 1 January 2009 with early adoption permitted for annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.

Main Requirements

This Standard:

 

(a)       specifies how an entity should report information about its operating segments in annual financial reports and, as a consequential amendment to AASB 134 Interim Financial Reporting, requires an entity to report selected information about its operating segments in interim financial reports. It also sets out requirements for related disclosures about products and services, geographical areas and major customers;

(b)      requires an entity to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, financial information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments;

(c)       requires an entity to report a measure of operating segment profit or loss and of segment assets. It also requires an entity to report a measure of segment liabilities and particular income and expense items if such measures are regularly provided to the chief operating decision maker. It requires reconciliations of total reportable segment revenues, total profit or loss, total assets, liabilities and other amounts disclosed for reportable segments to corresponding amounts in the entity’s financial statements;

(d)      requires an entity to report information about the revenues derived from its products or services (or groups of similar products and services), about the countries in which it earns revenues and holds assets, and about major customers, regardless of whether that information is used by management in making operating decisions. However, the Standard does not require an entity to report information that is not prepared for internal use if the necessary information is not available and the cost to develop it would be excessive; and

(e)       requires an entity to give descriptive information about the way the operating segments were determined, the products and services provided by the segments, differences between the measurements used in reporting segment information and those used in the entity’s financial statements, and changes in the measurement of segment amounts from period to period.

Consequential amendments

Consequential amendments to other Australian Accounting Standards are included in AASB 2007-3 Amendments to Australian Accounting Standards Arising from AASB 8 (February 2007). 

Transitional Provisions

Segment information for prior years that is reported as comparative information for the initial year of application is to be restated to conform to the requirements of this Standard, unless the necessary information is not available and the cost to develop it would be excessive.

 

Differences between this Standard and AASB 114

The main changes from AASB 114 are described below.

Scope

The Standard does not apply to not-for-profit entities in common with AASB 114.  AASB 114 applied to a broader range of for-profit entities, namely those that are for-profit reporting entities.

This Standard applies to for-profit entities whose debt or equity instruments are traded in a public market or that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market.

Identification of segments

The requirements of this Standard are based on the information about the components of the entity that management uses to make decisions about operating matters. This Standard requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and assess its performance. AASB 114 required identification of two sets of segments – one based on related products and services, and the other on geographical areas. AASB 114 regarded one set as primary segments and the other as secondary segments.

A component of an entity that sells primarily or exclusively to other operating segments of the entity is included in the Standard’s definition of an operating segment if the entity is managed that way. AASB 114 limited reportable segments to those that earn a majority of their revenue from sales to external customers and therefore did not require the different stages of vertically integrated operations to be identified as separate segments.

Measurement of segment information

This Standard requires the amount reported for each operating segment item to be the measure reported to the chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. AASB 114 required segment information to be prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the consolidated group or entity.

AASB 114 defined segment revenue, segment expense, segment result, segment assets and segment liabilities.  This Standard does not define these terms, but requires an explanation of how segment profit or loss, segment assets and segment liabilities are measured for each reportable segment.

Disclosure

This Standard requires an entity to disclose the following information:

(a)       factors used to identify the entity’s operating segments, including the basis of organisation (for example, whether management organises the entity around differences in products and services, geographical areas, regulatory environments, or a combination of factors and whether segments have been aggregated); and

(b)      types of products and services from which each reportable segment derives its revenues.

AASB 114 required the entity to disclose specified items of information about its primary segments. This Standard requires an entity to disclose specified amounts about each reportable segment, if the specified amounts are included in the measure of segment profit or loss and are reviewed by or otherwise regularly provided to the chief operating decision maker.

This Standard requires an entity to report interest revenue separately from interest expense for each reportable segment unless a majority of the segment’s revenues are from interest and the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment and to make decisions about resources to be allocated to the segment. AASB 114 did not require disclosure of interest income and expense.

This Standard requires an entity, including an entity with a single reportable segment, to disclose information for the entity as a whole about its products and services, geographical areas, and major customers. This requirement applies, regardless of the entity’s organisation, if the information is not included as part of the disclosures about segments. AASB 114 required the disclosure of secondary segment information for either industry or geographical segments, to supplement the information given for the primary segments.


Comparison with International Pronouncements

AASB 8 and IFRS 8

AASB 8 is equivalent to IFRS 8 Operating Segments issued by the IASB.  Paragraphs that have been added to this Standard (and do not appear in the text of the equivalent IASB Standard) are identified with the prefix “Aus”, followed by the number of the relevant IASB paragraph and decimal numbering.  IFRS 8 text that has been deleted from this Standard (and does not affect IFRS compliance) is listed in a separate section after the Standard.

Compliance with IFRS 8

Entities that comply with AASB 8 will simultaneously be in compliance with IFRS 8.

AASB 8 and IPSASs

International Public Sector Accounting Standards (IPSASs) are issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants.

IPSAS 18 Segment Reporting which deals with segment reporting by not-for-profit entities in the public sector adopts a fundamentally different approach to identifying operating segments and the measurement of segment information.


aCCOUNTING STANDARD AASB 8

The Australian Accounting Standards Board makes Accounting Standard AASB 8 Operating Segments under section 334 of the Corporations Act 2001.

 

 

D.G. Boymal

Dated 26 February 2007

Chair – AASB

 

 

aCCOUNTING STANDARD AASB 8

Operating Segments

Core Principle

1.        An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

Scope

2.        [Deleted by the AASB]

Aus2.1          This Standard applies to:

(a)       each for-profit entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity;

(b)      general purpose financial reports of each other for-profit reporting entity; and

(c)       financial reports of a for-profit entity that are, or are held out to be, general purpose financial reports;

in respect of:

(d)      the separate or individual financial statements of an entity:

(i)        whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or

(ii)       that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and

(e)       the consolidated financial statements of a group with a parent:

(i)        whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or

(ii)       that files, or is in the process of filing, the consolidated financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market;

Aus2.2          This Standard applies to annual reporting periods beginning on or after 1 January 2009.

Aus2.3          This Standard may be applied to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009.  When an entity applies this Standard to an annual reporting period beginning before 1 January 2009, it shall disclose that fact.

Aus2.4          The requirements specified in this Standard apply to the financial report where information resulting from their application is material in accordance with AASB 1031 Materiality.

Aus2.5          When applicable, this Standard supersedes AASB 114 Segment Reporting as made on 15 July 2004 and amended to 5 September 2005.

3.        If an entity that is not required to apply this Standard chooses to disclose information about segments that does not comply with this Standard, it shall not describe the information as segment information.

4.        If a financial report contains both the consolidated financial statements of a parent that is within the scope of this Standard as well as the parent’s separate financial statements, segment information is required only in the consolidated financial statements.

Operating Segments

5.        An operating segment is a component of an entity:

(a)       that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);

(b)      whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and

(c)       for which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenues, for example, start-up operations may be operating segments before earning revenues.

6.        Not every part of an entity is necessarily an operating segment or part of an operating segment. For example, a corporate headquarters or some functional departments may not earn revenues or may earn revenues that are only incidental to the activities of the entity and would not be operating segments. For the purposes of this Standard, an entity’s post-employment benefit plans are not operating segments.

7.        The term ‘chief operating decision maker’ identifies a function, not necessarily a manager with a specific title. That function is to allocate resources to and assess the performance of the operating segments of an entity. Often the chief operating decision maker of an entity is its chief executive officer or chief operating officer but, for example, it may be a group of executive directors or others.

8.        For many entities, the three characteristics of operating segments described in paragraph 5 clearly identify its operating segments. However, an entity may produce reports in which its business activities are presented in a variety of ways. If the chief operating decision maker uses more than one set of segment information, other factors may identify a single set of components as constituting an entity’s operating segments, including the nature of the business activities of each component, the existence of managers responsible for them, and information presented to the board of directors.

9.        Generally, an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. The term ‘segment manager’ identifies a function, not necessarily a manager with a specific title. The chief operating decision maker also may be the segment manager for some operating segments. A single manager may be the segment manager for more than one operating segment. If the characteristics in paragraph 5 apply to more than one set of components of an organisation but there is only one set for which segment managers are held responsible, that set of components constitutes the operating segments.

10.      The characteristics in paragraph 5 may apply to two or more overlapping sets of components for which managers are held responsible. That structure is sometimes referred to as a matrix form of organisation. For example, in some entities, some managers are responsible for different product and service lines worldwide, whereas other managers are responsible for specific geographical areas. The chief operating decision maker regularly reviews the operating results of both sets of components, and financial information is available for both. In that situation, the entity shall determine which set of components constitutes the operating segments by reference to the core principle.

Reportable segments

11.      An entity shall report separately information about each operating segment that:

(a)       has been identified in accordance with paragraphs 5–10 or results from aggregating two or more of those segments in accordance with paragraph 12; and

(b)      exceeds the quantitative thresholds in paragraph 13.

Paragraphs 14–19 specify other situations in which separate information about an operating segment shall be reported.

Aggregation criteria

12.      Operating segments often exhibit similar long-term financial performance if they have similar economic characteristics. For example, similar long-term average gross margins for two operating segments would be expected if their economic characteristics were similar. Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of this Standard, the segments have similar economic characteristics, and the segments are similar in each of the following respects:

(a)       the nature of the products and services;

(b)      the nature of the production processes;

(c)       the type or class of customer for their products and services;

(d)      the methods used to distribute their products or provide their services; and

(e)       if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities.

Quantitative thresholds

13.      An entity shall report separately information about an operating segment that meets any of the following quantitative thresholds:

(a)       its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments;

(b)      the absolute amount of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss;

(c)       its assets are 10 per cent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if management believes that information about the segment would be useful to users of the financial statements.

14.      An entity may combine information about operating segments that do not meet the quantitative thresholds with information about other operating segments that do not meet the quantitative thresholds to produce a reportable segment only if the operating segments have similar economic characteristics and share a majority of the aggregation criteria listed in paragraph 12.

15.      If the total external revenue reported by operating segments constitutes less than 75 per cent of the entity’s revenue, additional operating segments shall be identified as reportable segments (even if they do not meet the criteria in paragraph 13) until at least 75 per cent of the entity’s revenue is included in reportable segments.

16.      Information about other business activities and operating segments that are not reportable shall be combined and disclosed in an ‘all other segments’ category separately from other reconciling items in the reconciliations required by paragraph 28. The sources of the revenue included in the ‘all other segments’ category shall be described.

17.      If management judges that an operating segment identified as a reportable segment in the immediately preceding period is of continuing significance, information about that segment shall continue to be reported separately in the current period even if it no longer meets the criteria for reportability in paragraph 13.

18.      If an operating segment is identified as a reportable segment in the current period in accordance with the quantitative thresholds, segment data for a prior period presented for comparative purposes shall be restated to reflect the newly reportable segment as a separate segment, even if that segment did not satisfy the criteria for reportability in paragraph 13 in the prior period, unless the necessary information is not available and the cost to develop it would be excessive.

19.      There may be a practical limit to the number of reportable segments that an entity separately discloses beyond which segment information may become too detailed. Although no precise limit has been determined, as the number of segments that are reportable in accordance with paragraphs 13–18 increases above ten, the entity should consider whether a practical limit has been reached.

Disclosure

20.      An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

21.      To give effect to the principle in paragraph 20, an entity shall disclose the following for each period for which an income statement is presented:

(a)       general information as described in paragraph 22;

(b)      information about reported segment profit or loss, including specified revenues and expenses included in reported segment profit or loss, segment assets, segment liabilities and the basis of measurement, as described in paragraphs 23–27; and

(c)       reconciliations of the totals of segment revenues, reported segment profit or loss, segment assets, segment liabilities and other material segment items to corresponding entity amounts as described in paragraph 28.

Reconciliations of balance sheet amounts for reportable segments to the entity’s balance sheet amounts are required for each date at which a balance sheet is presented. Information for prior periods shall be restated as described in paragraphs 29 and 30.

General information

22.      An entity shall disclose the following general information:

(a)       factors used to identify the entity’s reportable segments, including the basis of organisation (for example, whether management has chosen to organise the entity around differences in products and services, geographical areas, regulatory environments, or a combination of factors and whether operating segments have been aggregated); and

(b)      types of products and services from which each reportable segment derives its revenues.

Information about profit or loss, assets and liabilities

23.      An entity shall report a measure of profit or loss and total assets for each reportable segment. An entity shall report a measure of liabilities for each reportable segment if such an amount is regularly provided to the chief operating decision maker. An entity shall also disclose the following about each reportable segment if the specified amounts are included in the measure of segment profit or loss reviewed by the chief operating decision maker, or are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss:

(a)       revenues from external customers;

(b)      revenues from transactions with other operating segments of the same entity;

(c)       interest revenue;

(d)      interest expense;

(e)       depreciation and amortisation;

(f)       material items of income and expense disclosed in accordance with paragraph 86 of AASB 101 Presentation of Financial Statements;

(g)      the entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method;

(h)      income tax expense or income; and

(i)        material non-cash items other than depreciation and amortisation.

An entity shall report interest revenue separately from interest expense for each reportable segment unless a majority of the segment’s revenues are from interest and the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment and make decisions about resources to be allocated to the segment. In that situation, an entity may report that segment’s interest revenue net of its interest expense and disclose that it has done so.

24.      An entity shall disclose the following about each reportable segment if the specified amounts are included in the measure of segment assets reviewed by the chief operating decision maker or are otherwise regularly provided to the chief operating decision maker, even if not included in the measure of segment assets:

(a)       the amount of investment in associates and joint ventures accounted for by the equity method; and

(b)      the amounts of additions to non-current assets[*] other than financial instruments, deferred tax assets, post-employment benefit assets (see AASB 119 Employee Benefits paragraphs 54–58) and rights arising under insurance contracts.

Measurement

25.      The amount of each segment item reported shall be the measure reported to the chief operating decision maker for the purposes of making decisions about allocating resources to the segment and assessing its performance. Adjustments and eliminations made in preparing an entity’s financial statements and allocations of revenues, expenses, and gains or losses shall be included in determining reported segment profit or loss only if they are included in the measure of the segment’s profit or loss that is used by the chief operating decision maker. Similarly, only those assets and liabilities that are included in the measures of the segment’s assets and segment’s liabilities that are used by the chief operating decision maker shall be reported for that segment. If amounts are allocated to reported segment profit or loss, assets or liabilities, those amounts shall be allocated on a reasonable basis.

26.      If the chief operating decision maker uses only one measure of an operating segment’s profit or loss, the segment’s assets or the segment’s liabilities in assessing segment performance and deciding how to allocate resources, segment profit or loss, assets and liabilities shall be reported at those measures. If the chief operating decision maker uses more than one measure of an operating segment’s profit or loss, the segment’s assets or the segment’s liabilities, the reported measures shall be those that management believes are determined in accordance with the measurement principles most consistent with those used in measuring the corresponding amounts in the entity’s financial statements.

27.      An entity shall provide an explanation of the measurements of segment profit or loss, segment assets and segment liabilities for each reportable segment. At a minimum, an entity shall disclose the following:

(a)       the basis of accounting for any transactions between reportable segments;

(b)      the nature of any differences between the measurements of the reportable segments’ profits or losses and the entity’s profit or loss before income tax expense or income and discontinued operations (if not apparent from the reconciliations described in paragraph 28). Those differences could include accounting policies and policies for allocation of centrally incurred costs that are necessary for an understanding of the reported segment information;

(c)       the nature of any differences between the measurements of the reportable segments’ assets and the entity’s assets (if not apparent from the reconciliations described in paragraph 28). Those differences could include accounting policies and policies for allocation of jointly used assets that are necessary for an understanding of the reported segment information;

(d)      the nature of any differences between the measurements of the reportable segments’ liabilities and the entity’s liabilities (if not apparent from the reconciliations described in paragraph 28). Those differences could include accounting policies and policies for allocation of jointly utilised liabilities that are necessary for an understanding of the reported segment information;

(e)       the nature of any changes from prior periods in the measurement methods used to determine reported segment profit or loss and the effect, if any, of those changes on the measure of segment profit or loss; and

(f)       the nature and effect of any asymmetrical allocations to reportable segments. For example, an entity might allocate depreciation expense to a segment without allocating the related depreciable assets to that segment.

Reconciliations

28.      An entity shall provide reconciliations of all of the following:

(a)       the total of the reportable segments’ revenues to the entity’s revenue;

(b)      the total of the reportable segments’ measures of profit or loss to the entity’s profit or loss before tax expense (tax income) and discontinued operations. However, if an entity allocates to reportable segments items such as tax expense (tax income), the entity may reconcile the total of the segments’ measures of profit or loss to the entity’s profit or loss after those items;

(c)       the total of the reportable segments’ assets to the entity’s assets;

(d)      the total of the reportable segments’ liabilities to the entity’s liabilities if segment liabilities are reported in accordance with paragraph 23; and

(e)       the total of the reportable segments’ amounts for every other material item of information disclosed to the corresponding amount for the entity.

All material reconciling items shall be separately identified and described. For example, the amount of each material adjustment needed to reconcile reportable segment profit or loss to the entity’s profit or loss arising from different accounting policies shall be separately identified and described.

Restatement of previously reported information

29.      If an entity changes the structure of its internal organisation in a manner that causes the composition of its reportable segments to change, the corresponding information for earlier periods, including interim periods, shall be restated unless the information is not available and the cost to develop it would be excessive. The determination of whether the information is not available and the cost to develop it would be excessive shall be made for each individual item of disclosure. Following a change in the composition of its reportable segments, an entity shall disclose whether it has restated the corresponding items of segment information for earlier periods.

30.      If an entity has changed the structure of its internal organisation in a manner that causes the composition of its reportable segments to change and if segment information for earlier periods, including interim periods, is not restated to reflect the change, the entity shall disclose in the year in which the change occurs segment information for the current period on both the old basis and the new basis of segmentation, unless the necessary information is not available and the cost to develop it would be excessive.

Entity-wide disclosures

31.      Paragraphs 32–34 apply to all entities subject to this Standard including those entities that have a single reportable segment. Some entities’ business activities are not organised on the basis of differences in related products and services or differences in geographical areas of operations. Such an entity’s reportable segments may report revenues from a broad range of essentially different products and services, or more than one of its reportable segments may provide essentially the same products and services. Similarly, an entity’s reportable segments may hold assets in different geographical areas and report revenues from customers in different geographical areas, or more than one of its reportable segments may operate in the same geographical area. Information required by paragraphs 32–34 shall be provided only if it is not provided as part of the reportable segment information required by this Standard.

Information about products and services

32.      An entity shall report the revenues from external customers for each product and service, or each group of similar products and services, unless the necessary information is not available and the cost to develop it would be excessive, in which case that fact shall be disclosed. The amounts of revenues reported shall be based on the financial information used to produce the entity’s financial statements.

Information about geographical areas

33.      An entity shall report the following geographical information, unless the necessary information is not available and the cost to develop it would be excessive:

(a)       revenues from external customers (i) attributed to the entity’s country of domicile and (ii) attributed to all foreign countries in total from which the entity derives revenues. If revenues from external customers attributed to an individual foreign country are material, those revenues shall be disclosed separately. An entity shall disclose the basis for attributing revenues from external customers to individual countries; and

(b)      non-current assets[†] other than financial instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts (i) located in the entity’s country of domicile and (ii) located in all foreign countries in total in which the entity holds assets. If assets in an individual foreign country are material, those assets shall be disclosed separately.

The amounts reported shall be based on the financial information that is used to produce the entity’s financial statements. If the necessary information is not available and the cost to develop it would be excessive, that fact shall be disclosed. An entity may provide, in addition to the information required by this paragraph, subtotals of geographical information about groups of countries.

Information about major customers

34.      An entity shall provide information about the extent of its reliance on its major customers. If revenues from transactions with a single external customer amount to 10 per cent or more of an entity’s revenues, the entity shall disclose that fact, the total amount of revenues from each such customer, and the identity of the segment or segments reporting the revenues. The entity need not disclose the identity of a major customer or the amount of revenues that each segment reports from that customer. For the purposes of this Standard, a group of entities known to a reporting entity to be under common control shall be considered a single customer, and a government (national, state, provincial, territorial, local or foreign) and entities known to the reporting entity to be under the control of that government shall be considered a single customer.

Transition and effective date

35.      [Deleted by the AASB]

36.      Segment information for prior years that is reported as comparative information for the initial year of application shall be restated to conform to the requirements of this Standard, unless the necessary information is not available and the cost to develop it would be excessive.

Withdrawal of IAS 14

37.      [Deleted by the AASB]


APPENDIX A

Defined Term

This appendix is an integral part of AASB 8.

operating segment

An operating segment is a component of an entity:

(a)       that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);

(b)      whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and

(c)       for which discrete financial information is available.


DELETED IFRS 8 TEXT

Deleted IFRS 8 text is not part of AASB 8.

Paragraph 2

This IFRS shall apply to:

(a)       the separate or individual financial statements of an entity:

(i)        whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or

(ii)       that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and

(b)      the consolidated financial statements of a group with a parent:

(i)        whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or

(ii)       that files, or is in the process of filing, the consolidated financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market.

Paragraph 35

An entity shall apply this IFRS in its annual financial statements for periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies this IFRS in its financial statements for a period before 1 January 2009, it shall disclose that fact.

Paragraph 37

This IFRS supersedes IAS 14 Segment Reporting.



[*]     For assets classified according to a liquidity presentation, non-current assets are assets that include amounts expected to be recovered more than twelve months after the balance sheet date.

[†]     For assets classified according to a liquidity presentation, non-current assets are assets that include amounts expected to be recovered more than twelve months after the balance sheet date.