Segment reporting essay

The rules on segment reporting appear in IFRS statement number 8, first issued in 2006 and updated at several points since. In the United States, these rules build upon and replace previous domestic rules known as Statement of Financial Accounting Standards number 131.

Segment reporting is the practice of breaking down accounts in an annual report. Most countries which have such rules do so under International Financial Reporting Standards. These are rules and principles agreed by international bodies with the aim of making it easier to compare the performance of companies in different countries.

There are some limitations on these segment reporting requirements. One is that a company should generally only detail up to 10 different segments in its annual report, even in the rare situation where more than 10 segments meet the qualifying limits. In this situation, the 10 largest segments overall should be listed.