IFRS Taxonomy 2020 – 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

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

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies 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.

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

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

		Car parts	Motor vessels	Software	Electronics	Finance	All other		Totals
		CU	CU	CU	CU	CU	CU		CU
Revenues from external customers		3,000	5,000	9,500	12,000	5,000	1,000	^(a)	35,500
Intersegment revenues		–	–	3,000	1,500	–	–		4,500
Interest revenue		450	800	1,000	1,500	–	–		3,750
Interest expense		350	600	700	1,100	–	–		2,750
Net interest revenue^(b)		–	–	–	–	1,000	–		1,000
Depreciation and amortisation		200	100	50	1,500	1,100	–		2,950
Reportable segment profit		200	70	900	2,300	500	100		4,070
Other material non-cash items:
	Impairment of assets	–	200	–	–	–	–		200
Reportable segment assets		2,000	5,000	3,000	12,000	57,000	2,000		81,000
Expenditures for reportable segment non-current assets		300	700	500	800	600	–		2,900
Reportable segment liabilities		1,050	3,000	1,800	8,000	30,000	–		43,850

(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.

(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.

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities

Revenues	CU
Total revenues for reportable segments	39,000
Other revenues	1,000
Elimination of intersegment revenues	( 4,500)
Entity’s revenues	35,500

Profit or loss		CU
Total profit or loss for reportable segments		3,970
Other profit or loss		100
Elimination of intersegment profits		( 500)
Unallocated amounts:
	Litigation settlement received	500
	Other corporate expenses	( 750)
Adjustment to pension expense in consolidation		( 250)
Income before income tax expense		3,070

Assets	CU
Total assets for reportable segments	79,000
Other assets	2,000
Elimination of receivable from corporate headquarters	( 1,000)
Other unallocated amounts	1,500
Entity’s assets	81,500

Liabilities	CU
Total liabilities for reportable segments	43,850
Unallocated defined benefit pension liabilities	25,000
Entity’s liabilities	68,850

Other material items	Reportable segment totals CU		Adjustments CU		Entity totals CU
Interest revenue		3,750		75		3,825
Interest expense		2,750		( 50)		2,700
Net interest revenue (finance segment only)		1,000		–		1,000
Expenditures for assets		2,900		1,000		3,900
Depreciation and amortisation		2,950		–		2,950
Impairment of assets		200		–		200

Geographical information

Geographical information	Revenues ^(a)	Non-current assets
	CU	CU
United States	19,000	11,000
Canada	4,200	–
China	3,400	6,500
Japan	2,900	3,500
Other countries	6,000	3,000
Total	35,500	24,000

(a) Revenues are attributed to countries on the basis of the customer’s location.

Information about major customers

Revenues from one customer of Diversified Company’s software and electronics segments represent approximately CU 5,000 of the Company’s total revenues.

The Foundation has trade marks registered around the world (Marks) including ‘IAS®’, ‘IASB®’, the IASB® logo, ‘IFRIC®’, ‘IFRS®’, the IFRS® logo, ‘IFRS for SMEs®’, the IFRS for SMEs® logo, ‘IFRS Taxonomy’, ‘International Accounting Standards®’, ‘International Financial Reporting Standards®’, the ‘Hexagon Device’, ‘NIIF®’ and ‘SIC®’. Further details of the Foundation’s Marks are available from the Foundation on request.

XBRL attributes

IFRS Taxonomy 2020 – Illustrative examples

Operating Segments