Operating Segments Essay Example | Topics and Well Written Essays - 1500 words - 2

Operating Segments - Essay Example IFRS 8 normally applies to the individual and separate financial statements of a business organization, or consolidated financial statements of a group of business organizations managed by a company. Through this statement, we can denote that there is a need of carrying out financial reporting through operational segment reporting (Bragg, 2010). Segment reporting involves giving of separate accounts of the individual divisions or units of a company, its subsidiaries and other divisions. In an annual accounting report, the purpose of a financial segment reporting is to give an accurate picture of the performance of a public company to its shareholders and investors (Crawford and Helliar, 2010). Future or prospective investors will also use this financial statement for purposes of making a decision on whether to invest or not in a business organization. For the management of an organization, segment reporting is used for purposes of evaluating the assets, liabilities, expenses and inco me of each segment. This is for purposes of assessing how risky or profitable the business segment under consideration is. It is through this assessment that the managers of a business organization will develop policies aimed at meeting the objectives and aims of the business organization (Bragg, 2010). When it comes to the evaluation of large capitalized companies, carrying out an analysis of important financial information is the beginning point. On a general perspective, it is always difficult to understand the financial records and information of large capitalized business organizations (Bragg, 2010). To understand their operations and financial records, there is a need of analyzing every operation of the business organizations. This is individually. The segment data of a company is therefore an important place to begin an analysis of the