Segment Reporting

Definition

Breaking down financial results by business unit, geography, or product line to show which parts of the company are actually making money. It's where corporate winners and losers get exposed despite management's attempts at averaging.

Example Usage

The segment reporting revealed that while the company was profitable overall, the European division had been hemorrhaging cash for three years.

Origin

Required by accounting standards starting in the 1970s after investors demanded more transparency

Fun Fact

Companies constantly lobby to report fewer segments because detailed breakdowns make it harder to hide underperforming divisions from activist investors.

Source: FASB ASC 280 and IFRS 8 reporting requirements

Related Terms

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accountancy

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underwrite

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