What is Segment ?
Segments can be used to meet international accounting rules (=> IAS / IFRS / U.S. GAAP) regarding "segment reporting".
Excerpt from IAS 14: … reporting is required for a business or geographical segment when the majority of its revenues stems from sales to external customers and segment revenues account for at least 10% of total internal and external revenues of all segments, segment income accounts for at least 10% of all segment income, or segment assets account for at least 10% of the assets of all segments. A segment can be reported separately even if it does not meet these size requirements. If the segments subject to reporting requirements account for less than 75% of total consolidated revenues or enterprise revenues, then other segments must be reported on separately, irrespective of the 10% limit, until at least this 75% is reached. …
The Business Area or Profit Center objects can be used as alternatives.
The segment is provided in addition because the business area and/or profit center were frequently used for other purposes in the past, to meet other requirements.
Assignment of Segment to a Profit Center
Note: Once a Segment is assigned to a Profit Center, It cannot be changed. Hence one has to be very very careful in assigning a segment to a profit center.
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