A business segment or geographical segment should be identified as a reportable segment if:
- Its revenue from sales to external customers and from transactions with other segments is 10 per cent or more of the total revenue, external and internal, of all segments; or
- Its segment result, whether profit or loss, is 10 per cent or more of –
- The combined result of all segments in profit, or
- The combined result of all segments in loss, (iii) Whichever is greater in absolute amount; or
- Its segment assets are 10 per cent or more of the total assets of all segments.
A business segment or a geographical segment which is not a reportable segment as per above paragraph, may be designated as a reportable segment despite its size at the discretion of the management of the enterprise. If that segment is not designated as a reportable segment, it should be included as an unallocated reconciling item.
If total external revenue attributable to reportable segments constitutes less than 75% of the total enterprise revenue, additional segments should be identified as reportable segments, even if they do not meet the 10% thresholds, until at least 75% of total enterprise revenue is included in reportable segments.
A segment identified as a reportable segment in the immediately preceding period because it satisfied the relevant 10% thresholds should continue to be a reportable segment for the current period notwithstanding that its revenue, result, and assets all no longer meet the 10% thresholds.
If a segment is identified as a reportable segment in the current period because it satisfies the pertinent 10% thresholds, preceding-period segment data that is presented for comparative purposes should, unless it is impracticable to do so, be restated to reflect the newly reportable segment as a separate segment, even if that segment did not satisfy the 10% thresholds in the preceding period.