Segment Reporting
Essay Preview: Segment Reporting
Report this essay
Today, economy is continuously developing and growing. The management need the financial statement to monitor their performance, forecast their cash flow, and to allocate the resource to achieve the maximum its profit. Investors need financial statement to make their investment. Government agencies need financial statement to monitor and regulate the firms operating activities. information to determine condition, trends, and ratio to assist in predicting cash flows of firms. These factors are often compared with those of other firms, with industry-wide data. And general national and international economic information international economic information is considered in making an overall evaluation of the risk involved. When a firm engages in activities in several industries or geographic areas, (a) help users of the financial statements to better understand the
entitys 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 entitys 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