IFRS Accounting Taxonomy 2024 – Illustrative examples
Operating Segments
Examples from IFRS 8 (IG2, IG3, IG4, IG5 and IG6) representing some of the disclosures required by IFRS 8 for operating segments using block and detailed XBRL tagging.
Description of the types of products and services from which each reportable segment derives its revenues
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Diversified Company has five reportable segments: car parts, motor vessels, software, electronics and finance. The car parts segment produces replacement parts for sale to car parts retailers. The motor vessels segment produces small motor vessels to serve the offshore oil industry and similar businesses. The software segment produces application software for sale to computer manufacturers and retailers. The electronics segment produces integrated circuits and related products for sale to computer manufacturers. The finance segment is responsible for portions of the company’s financial operations including financing customer purchases of products from other segments and property lending operations. |
Measurement of operating segment profit or loss, assets and liabilities
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The accounting policy information about operating segments is the same as that described as part of the material accounting policy information, except that pension expense for each operating segment is recognised and measured on the basis of cash payments to the pension plan. Diversified Company evaluates performance on the basis of profit or loss from operations before tax expense not including non-recurring gains and losses and foreign exchange gains and losses. |
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Diversified Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, ie at current market prices. |
Factors that management used to identify the entity’s reportable segments
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Diversified Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. Most of the businesses were acquired as individual units, and the management at the time of the acquisition was retained. |
Information about reportable segment profit or loss, assets
and liabilities
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Car parts |
Motor vessels |
Software |
Electronics |
Finance |
All other |
Totals |
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CU |
CU |
CU |
CU |
CU |
CU |
CU |
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Revenues from external customers |
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(a) |
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Intersegment revenues |
– |
– |
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– |
– |
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Interest revenue |
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– |
– |
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Interest expense |
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– |
– |
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Net interest revenue(b) |
– |
– |
– |
– |
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– |
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Depreciation and amortisation |
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– |
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Reportable segment profit |
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Other material non-cash items: |
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Impairment of assets |
– |
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– |
– |
– |
– |
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Reportable segment assets |
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Expenditures for reportable segment non-current assets |
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– |
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Reportable segment liabilities |
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– |
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(a) Revenues from segments below the quantitative thresholds are attributable to four operating segments of Diversified Company. Those segments include a small property business, an electronics equipment rental business, a software consulting practice and a warehouse leasing operation. None of those segments has ever met any of the quantitative thresholds for determining reportable segments. |
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(b) The finance segment derives a majority of its revenue from interest. Management primarily relies on net interest revenue, not the gross revenue and expense amounts, in managing that segment. Therefore, as permitted by paragraph 23, only the net amount is disclosed. |
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Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
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Revenues |
CU |
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Total revenues for reportable segments |
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Other revenues |
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Elimination of intersegment revenues |
( |
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Entity’s revenues |
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Profit or loss |
CU |
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Total profit or loss for reportable segments |
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Other profit or loss |
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Elimination of intersegment profits |
( |
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Unallocated amounts: |
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Litigation settlement received |
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Other corporate expenses |
( |
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Adjustment to pension expense in consolidation |
( |
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Income before income tax expense |
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Assets |
CU |
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Total assets for reportable segments |
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Other assets |
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Elimination of receivable from corporate headquarters |
( |
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Other unallocated amounts |
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Entity’s assets |
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Liabilities |
CU |
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Total liabilities for reportable segments |
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Unallocated defined benefit pension liabilities |
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Entity’s liabilities |
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Other material items |
Reportable segment totals CU |
Adjustments CU |
Entity totals CU |
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Interest revenue |
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Interest expense |
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( |
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Net interest revenue |
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– |
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Expenditures for assets |
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Depreciation and amortisation |
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– |
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Impairment of assets |
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– |
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Geographical information
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Geographical information |
Revenues (a) |
Non-current assets |
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CU |
CU |
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United States |
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Canada |
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– |
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China |
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Japan |
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Other countries |
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Total |
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(a) Revenues are attributed to countries on the basis of the customer’s location. |
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Information about major customers
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Revenues from one customer of Diversified Company’s software and electronics segments represent approximately CU |
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