Segment reporting breaks down the operations of a company into manageable pieces, or segments. Public companies must then record detailed financial statements for each operating segment. The goal is to increase transparency for creditors and investors, especially regarding the company's most important operating units.What is the purpose of segment reporting?
The objective of segment reporting is to help financial statement users better understand your company's performance, better assess your company's prospects for future cash flows, and make more informed judgments about your company as a whole.What is a segment reporting example?
Example of Business Segment Reporting
When compiling the bank's financial statements, its financial officer would be required to separate all three of these divisions in terms of their income items as well as the assets listed on the balance sheet.
