Question

What is the difference between an operating segment and a reportable segment in
AASB8/HKFRS8? Do the definitions of these two segment types give discretion to management
that might help or hinder comparisons between companies?

Answer 1

I And O Penating Segment - An operating sa in An operating segment is a corgponent of an entity: a) that engages in business activities from conics it may eann nevenues and expenses - Alhose operating results are regulanty lid reviewed by the entity's Chief operating decision maken to make decisions about resounces to be allocated to the segment or and assess its performance on © for zonas which discrete available. lot on financial loont inkormation @ Anis op enoting sigment) may engage in business activities for which it has yet to earn пцуелаеі: ой ② Eveny part of an entity is not necessarily an openating segment ☺ An openating segment has a segment manager to who is dincetly accountable to and maintains hitregular contact with Chief operating decision maker to discuss operating activities, financial results, forecasts on plans for the segment.

Reportable segment A reportable segment is at that makes up at least in besiness's revencies on an exploitable segment! 10y of overall assets. @ э This segment is like a bresiness within a business so turn on on героrt be camyeni u - саn <f ConfС, meets the following Criteria non The regulan income genenated by the segment accounts for 10% or more of the oil on business's foray income o f - The segment has total gains or losses for the year equal to ore in excess of n 110% of the business's total gains or A Losses ? The segment's assets are equal to on greater than 10% of the businen's to tada Osset 4 While disclosing the financial information, each segments activities must be listed bis Sepanately as well as included in the no business's ovenall performance data.. 6 The disclosune mirt specify the reason Why each segment qualities as reportable. The business also must rust separately list all of the assets and liabilities specifically tied to the reportable segment

companies parisoos between Yes, the definitions on these two segmen types gore discretion to management that my, heyp or binder comparisons between Analysis Some entities business activities are set organised on the basis of differences in relo products and services on differences in geographical aneos of operations such an entity's reportable segments may repont revenues from a broad range of essentially different products or senvices, on more than one of its reportable segments may provide essentially the same products and services Similarly, an entity's reportable segment may hold assets in diffenent geograp- hical aneas and report revenues from customers in different geographical oneas, on more than one of its reportable segments may operate in the same geographical area