Your roadmap to accounting guidance in ASC 280

On the Radar: Segment reporting

Segment reporting provides information about the types of business activities in which a public entity engages. It also gives users of financial statements more clarity to the public entity’s performance, enables them to better assess prospects for future net cash flows, and helps them make more informed judgments about the public entity. This issue of On the Radar offers guidance to segment reporting under the requirements outlined in ASC 280.


Identification of operating segments

An entity’s first step in applying ASC 280 is to identify its operating segments. It performs such identification by using the management approach described in ASC 280-10-05-3, which is “based on the way that management organizes the segments within the public entity for making operating decisions and assessing performance.” As indicated in ASC 280-10-50-1, "a(n) operating segment is a component of a public entity that has all of the following characteristics:

  • It engages in business activities from which it may recognize revenues and incur expenses
  • Its operating results are regularly reviewed by the public entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance
  • Its discrete financial information is available"

An entity may need to use judgment when evaluating whether a component has all the characteristics of an operating segment.

On the Radar: Segment reporting

Reportable segments

Once an entity has identified its operating segments, it determines which of them to report (i.e., its “reportable segments”). The following steps should be considered in the identification of reportable segments:


Continue your segment reporting learning

For a comprehensive discussion of the requirements in ASC 280 related to identifying and disclosing operating segments, see Deloitte’s Roadmap Segment Reporting. Visit the Heads Up newsletter for the FASB’s November 2023 ASU on reportable segment disclosures.

group of people under sky at nigth

Let's talk!

Learn more about this topic


Ignacio Perez
Audit & Assurance Managing Director
Deloitte & Touche LLP


Insert Custom HTML fragment. Do not delete! This box/component contains code that is needed on this page. This message will not be visible when page is activated.

Fullwidth SCC. Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated.