Assessing segmental reporting
In this lesson, you'll learn how to assess segmental reporting and determine which business segments must be reported separately under the relevant accounting standards.
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In this lesson
- 0:00 Assessing segmental reporting overview
- 0:07 Benefits of segmental reporting
- 1:03 Limitations and challenges
- 2:01 Calculating 10% quantitative thresholds
- 3:40 Identifying reportable segments
- 4:18 Applying the 75% revenue test
About this lesson
Segmental reporting helps investors evaluate management strategy and predict future performance by breaking down revenues, profits and assets by region or business area. However, it has important limitations—it's management-focused, involves significant judgement, and lacks standardised measures, which can reduce comparability between entities and potentially conceal underperforming areas. You'll work through the practical mechanics of applying the 10% quantitative thresholds for revenue, profit and assets, then apply the 75% test to ensure you're reporting sufficient detail of total revenues separately—essential skills for Financial Reporting and Strategic Business Reporting papers.
Duration: 5m
Transcript
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