Pert 4 - Segment

Operating Segments
PSAK No. 5 (Rev 2009)
Edited by Taufik Hidayat 13-1

Operating Segment
 PSAK 5 (Rev 2009) specified the Operating
Segment as the only definition of segment.
 Operating segments is a component of an entity:
 that engages in business activities from which it
may earn revenues and incur expenses
 whose operating results are regularly reviewed
by the entity's chief operating decision maker to
make decisions about resources to be allocated
to the segment and assess its performance, and
 for which discrete financial information is
available
Operating Segment
 Revenue, profits or losses, and assets for each
segment are defined by the management as
used for internal decision making purposes.
 Operating segments can be product lines,
geographical areas, service lines of business, or
other segments of the entity determined by
management. There is no primary and
secondary segment reporting anymore.
 The segment reporting footnote presents
information on operating segments in the same
manner as used for internal decision making.

Reportable segments
An entity shall report separately

information about each operating
segment that :
• has been identified as operating
segment, and
• exceeds the quantitative
thresholds

Ten Percent Quantitative Thresholds
PSAK specified three 10
percent significance rules.
What is the 10
Separate disclosures are required
percent significance
if an operating segment meets at
rule concerning
least one of the tests.
segment disclosure?

 Its reported revenue, including both sales to
external customers and intersegment sales or
transfers, is 10 percent or more of the combined
revenue, internal and external, of all operating
segments,
 The absolute amount of its reported profit or loss
is 10 percent or more of the greater, in absolute
amount, of (a) the combined reported profit of
all operating segments that reported a profit or
(b) the combined reported loss of all segments
that reported a loss.
Continued
 Its assets are 10 percent or more of the
combined assets of all operating segments.

Illustration of
10 Percent Tests

Ten Percent Revenue Test
Segment Percent of Combined Reportable

Segment Revenue Revenue of $600,000 Segment
Food Products $323,000 53.8% Yes
Plastic and Packaging 113,000 18.8 Yes
Consumer and Commercial 45,000 7.5 No
Health and Scientific 86,000 14.3 Yes
Chemicals 33,000 5.5 No
Total $600,000 100.0%*
*Unrounded percents for segments total to 100 percent.

Separately
reportable?

Ten Percent Profit (Loss) Test
Profit Percent of Test Separately

Segment (Loss) Amount of $279,000 Reportable
Food Products $198,000 71.0% Yes
Consumer and Commercial (25,000) 9.0 No
Health and Scientific 22,000 7.9 No
Chemicals (9,000) 3.2 No
Separately
reportable?

Asset Test
Percent of
Segment Test Amount of Separately
Segment Assets $1,276,000 Reportable
Food Products $ 411,000 32.2% Yes

Consumer and Commercial 100,000 7.8 No
Health and Scientific 310,000 24.3 Yes
Chemicals 80,000 6.3 No
Total $1,276,000 100.0%
Separately
reportable?
Asset Test
Items comprising each

segment’s assets are
defined by management.

Seventy-Five Percent Revenue Test
Sales to unaffiliated customer by

reportable segments:
Food Products $317,000
Plastic and Packaging 95,000
Health and Science 86,000
Total of reportable segments $498,000
Consolidated revenue 572,000
Reportable segments’ percentage of
consolidated revenue 87.1%
Because this percentage if equal to or greater

than 75 percent, no further operating
$498,000  $572,000
segments must be separately reported.
Edited by Taufik Hidayat 14
Reporting Segment Information
PSAK 5 (rev 2009) states that
the following must be disclosed
for each segment determined to
be separately reportable.

 General information about (a) the factors used

to identify the entity’s reportable segments,
including the basis organization, and (b) types
of products and services from which each
reportable segment obtains its revenue.
 Information about the reported profit or loss,
including specified revenues and expenses
included in reported segment profit or loss,
segment assets and liabilities.
Continued
 Information on the following if these items are

included in the determination of segment assets:
(a) the amount of investment in associates and
joint ventures accounted for by equity method
and (b) the amounts of additions to non-current
assets.
 Reconciliations of the total reportable segments’
revenues, measures of segment profit or loss,
and segments’ assets & liabilities to the related
consolidated totals for those items.

PENGUNGKAPAN PADA
LEVEL ENTITAS
(Enterprisewide Disclosures)
Edited by Taufik Hidayat 18

Enterprisewide Disclosures
 Information about Products and

Services
 The company is required to report the
revenues from external customers for
each product and service, or each group of
similar products and services, unless it is
impractical.

 Information about Geographic Areas

 Revenues from external customers attributed
to home country of domicile and from external
customers attributed to foreign countries.
 non-current assets (i) located in the entity's
country of domicile and (ii) located in all
foreign countries.
 Revenues from, and non-current assets in,
any individual country, if material, must be
separately disclosed

 Information about Major Customers

 First issue is how to define an individual
customer.
 For applying the disclosure test, any single
customer, the federal government, a state
government, a local government, or a foreign
government is considered to be an individual
customer.
 Materiality is defined by PSAK 5 is10 percent.

Chapter Thirteen
The
End

Pert 4 - Segment

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Operating Segments

PSAK No. 5 (Rev 2009)

Edited by Taufik Hidayat 13-1

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An entity shall report separately

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Segment Percent of Combined Reportable

*Unrounded percents for segments total to 100 percent.

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Profit Percent of Test Separately

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Food Products $ 411,000 32.2% Yes

Items comprising each

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Sales to unaffiliated customer by

Because this percentage if equal to or greater

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 General information about (a) the factors used

 Information on the following if these items are

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 Information about Products and

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 Information about Geographic Areas

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 Information about Major Customers

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