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AS 17
to top management. Its predominant source of risks and returns becomes its
primary segment reporting format. Its secondary source of risks and returns
becomes its secondary segment reporting format.
22. A
‘matrix
presentation’ — both business segments and geographical
segments as primary segment reporting formats with
full segment disclosures
on each basis -- will often provide useful information if risks and returns of
an enterprise are strongly affected both by differences in the products and
services it produces and by differences in the geographical areas in which it
operates. This Standard does not require, but does not prohibit, a ‘matrix
presentation’.
23.
In some cases, organisation and internal reporting of an enterprise may
have developed along lines unrelated to both the types of products and
services it produces, and the geographical areas in which it operates. In
such cases, the internally reported segment data will not meet the objective
of this Standard. Accordingly, paragraph 20(b) requires the directors and
management of the enterprise to determine whether the risks
and returns of
the enterprise are more product/service driven or geographically driven and
to accordingly choose business segments or geographical segments as the
primary basis of segment reporting. The objective is to achieve a reasonable
degree of comparability with
other enterprises, enhance understandability of
the resulting information, and meet the needs of investors, creditors, and
others for information about product/service-related
and geographically-
related risks and returns.
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