In accordance with the Basic Standards of Accounting Standards for Business Enterprises, the Ministry of Finance issued Accounting Standards for Business Enterprises No. 35 — Segment Reporting on 2006/2/15, effective as of 2007/1/1.
1. Overview of Guidelines
If an enterprise engages in multiple businesses or operates across regions, it shall disclose segment information in accordance with this Standard. Segment information shall be disclosed based on the financial statements provided to external users.
II. Determination of Reportable Segments
Business Segment
A distinguishable component within an enterprise that provides individual products or services, and bears risks and rewards different from other components.
Regional Division
A distinguishable component within an enterprise that provides goods or services in a specific economic environment and assumes risks and rewards distinct from those of components operating in other economic environments.
10% importance threshold
- • Segment revenue accounts for 10% or more of total segment revenue
- • Absolute amount of segment profit (loss) is 10% or more of the greater of the total profits of all profitable segments or the total losses of all loss-making segments
- • Segment assets account for 10% or more of total segment assets
3. Disclosure of Segment Information
An enterprise shall distinguish between its primary and secondary reporting formats when disclosing segment information. For the primary reporting format, the notes should disclose segment revenue, segment expenses, segment profit (loss), total segment assets, and total segment liabilities.
75% threshold
If the combined external transaction revenue of reportable segments represents less than 75% of total consolidated or enterprise revenue, other segments shall be designated as reportable segments until this proportion reaches 75%.
Regulatory Document Attachment
Accounting Standards for Business Enterprises No. 35 — Segment Reporting (PDF)