Segment Reporting
Accounting Standards for the Public Sector
Objective
The objective of this Standard is to establish principles for reporting financial information by segments. The disclosure of this information will: (a) help users of the financial statements to better understand the entity’s past performance and to identify the resources allocated to support the major activities of the entity; and
(b) enhance the transparency of financial reporting and enable the entity to better discharge its accountability obligations.
Definition of a Segment
A segment is a distinguishable activity or group of activities of an entity for which it is appropriate to separately report financial information for the purpose of evaluating the entity’s past performance in achieving its objectives and for making decisions about the future allocation of resources.
Reporting By Segments
Under this Standard, public sector entities will identify as separate segments each distinguishable activity or group of activities for which financial information should be reported for purposes of evaluating the past performance of the entity in achieving its objectives, and for making decisions about the allocation of resources by the entity. In addition to disclosure of the information required by paragraphs 51 to 75 of this Standard, entities are also encouraged to disclose additional information about reported segments as identified by this Standard or as considered necessary for accountability and decision making purposes.
I. Users and Uses of Segmental Reporting
A. Investors
1. Interested in cash flows and risk or uncertainty of the cash flows
2. Interested in corporation as a whole rather than specific segments; however, factors influencing industry or geographic segments influence cash flows as a whole
3. Need disaggregation of sales and profits of lines of business and geographic segments
4. Disaggregation is especially helpful for diversified corporations;
Objective
The objective of this Standard is to establish principles for reporting financial information by segments. The disclosure of this information will: (a) help users of the financial statements to better understand the entity’s past performance and to identify the resources allocated to support the major activities of the entity; and
(b) enhance the transparency of financial reporting and enable the entity to better discharge its accountability obligations.
Definition of a Segment
A segment is a distinguishable activity or group of activities of an entity for which it is appropriate to separately report financial information for the purpose of evaluating the entity’s past performance in achieving its objectives and for making decisions about the future allocation of resources.
Reporting By Segments
Under this Standard, public sector entities will identify as separate segments each distinguishable activity or group of activities for which financial information should be reported for purposes of evaluating the past performance of the entity in achieving its objectives, and for making decisions about the allocation of resources by the entity. In addition to disclosure of the information required by paragraphs 51 to 75 of this Standard, entities are also encouraged to disclose additional information about reported segments as identified by this Standard or as considered necessary for accountability and decision making purposes.
I. Users and Uses of Segmental Reporting
A. Investors
1. Interested in cash flows and risk or uncertainty of the cash flows
2. Interested in corporation as a whole rather than specific segments; however, factors influencing industry or geographic segments influence cash flows as a whole
3. Need disaggregation of sales and profits of lines of business and geographic segments
4. Disaggregation is especially helpful for diversified corporations;