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Review of ASX200 entities Operating Segment disclosures

Review of ASX200 entities Operating Segment disclosures

We provide insights to assist listed entities assess how their segment disclosures compare to other entities in the ASX200.

Zuzana Paulech

Partner, Audit, Assurance & Risk Consulting

KPMG Australia


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The third edition in our KPMG Financial Reporting Insight series examines the annual reports of 45 ASX200 companies for the 2015 reporting season, focusing on the segment report and its interactions with the impairment disclosures and the operating and financial review.

Segment information is required to be disclosed in general purpose financial reports of listed entities in accordance with AASB 8 Operating Segments. Apart from being required, these disclosures provide users with the information they need to evaluate an entity’s business activities and the economic environment in which it operates. It also provides insights into how management assess the performance of and makes decisions about the business.

The importance of segment disclosures is further highlighted by the links that exist between these disclosures and information provided in an operating and financial review forming part of a listed entities directors’ report and the requirements of AASB 136 Impairment of Assets.

Although not an ASIC focus area, ASIC has definitely been paying more attention to the segment disclosures in recent times and especially how they interact with the impairment assessments entities are making for goodwill and the identification of cash generating units.

ASX200 entities Operating Segment disclosures key observations chart


What we have seen in the 2015 reporting period

  • 91 percent of entities reviewed disclosed multiple reportable segments.
    This report is intended to assist listed entities assess how their segment disclosures compare to other entities in the ASX200.
  • Entities on average disclosed three to four reportable segments with the majority of entities using products and services to determine their segments.
  • 81 percent of entities used a non-IFRS measure when measuring segment performance. 
  • In 81 percent of cases cash generating units with goodwill allocated to them aligned with or were at a lower level than the reportable segments.
  • In 78 percent of cases the reportable segments were consistent with how the performance of the business was disaggregated and discussed in the Operating and Financial Review.
  • Wide range of interpretations as to what is required to comply with the entity wide disclosure requirements on revenue by product and service type, geographical location and major customers.

KPMG Financial Reporting Insights

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