Pert 4 - Segment

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Operating Segments

PSAK No. 5 (Rev 2009)

Edited by Taufik Hidayat

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Operating SegmentOperating 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

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


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Operating SegmentOperating 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.

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.


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Reportable segmentsReportable segments


An entity shall report separately information about each operating segment that :•has been identified as operating segment, and•exceeds the quantitative thresholds

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Ten Percent Quantitative Ten Percent Quantitative ThresholdsThresholds

What is the 10 percent

significance rule concerning segment

disclosure?

What is the 10 percent

significance rule concerning segment

disclosure?

PSAK specified three 10 percent significance rules. Separate disclosures are required if an operating

segment meets at least one of the tests.

PSAK specified three 10 percent significance rules. Separate disclosures are required if an operating

segment meets at least one of the tests.


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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.


ContinuedContinuedEdited by Taufik Hidayat

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Its assets are 10 percent or more of the combined assets of all operating segments.



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Illustration of Illustration of 10 Percent 10 Percent

TestsTests


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Ten Percent Revenue TestTen Percent Revenue Test

Segment Percent of Combined Reportable Segment Revenue Revenue of $600,000 Segment

Food Products $323,000 53.8%Plastic and Packaging 113,000 18.8 Consumer and Commercial 45,000 7.5 Health and Scientific 86,000 14.3 Chemicals 33,000 5.5 Total $600,000 100.0%

YesYesNoYesNo

Separately reportable?

*Unrounded percents for segments total to 100 percent.

*


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Ten Percent Profit (Loss) TestTen Percent Profit (Loss) Test

Profit Percent of Test Separately Segment (Loss) Amount of $279,000 Reportable

Food Products $198,000 71.0%Plastic and Packaging 59,000 21.1 Consumer and Commercial (25,000) 9.0 Health and Scientific 22,000 7.9 Chemicals (9,000) 3.2

YesYesNoNoNo



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Asset TestAsset Test

Percent of Segment Test Amount of Separately Segment Assets $1,276,000 Reportable

Food Products $ 411,000 32.2%Plastic and Packaging 375,000 29.4 Consumer and Commercial 100,000 7.8 Health and Scientific 310,000 24.3 Chemicals 80,000 6.3 Total $1,276,000 100.0%

YesYesNoYesNo



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Asset TestAsset Test

Items comprising each segment’s

assets are defined by management.

Items comprising each segment’s

assets are defined by management.


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Seventy-Five Percent Revenue Seventy-Five Percent Revenue TestTest

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%

$498,000 $572,000

Because this percentage if equal to or greater than 75 percent, no further operating

segments must be separately reported.

Because this percentage if equal to or greater than 75 percent, no further operating

segments must be separately reported.Edited by Taufik Hidayat

14Edited by Taufik Hidayat

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Reporting Segment InformationReporting Segment Information

PSAK 5 (rev 2009) states that the following must be

disclosed for each segment determined to be

separately reportable.

PSAK 5 (rev 2009) states that the following must be

disclosed for each segment determined to be

separately reportable.


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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.

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.

ContinuedContinuedContinuedContinuedEdited by Taufik Hidayat

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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.

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.



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PENGUNGKAPAN PENGUNGKAPAN PADA LEVEL ENTITASPADA LEVEL ENTITAS

(Enterprisewide Enterprisewide DisclosuresDisclosures)


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Enterprisewide DisclosuresEnterprisewide 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.


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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


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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.



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Chapter ThirteenChapter Thirteen

The The EndEnd


Pert 4 - Segment

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