GAS 28 Segment reporting

• Adopted by the Accounting Standards Committee of Germany (ASCG) on 12 May 2020.
• Publication of the authoritative German version by the Federal Ministry of Justice and Consumer Protection under section 342(2) of the HGB on 5 August 2020.

This Standard governs the segment reporting that may supplement the consolidated financial statements in accordance with section 297(1) sentence 2 of the HGB. The objective of segment reporting is to convey information about a group’s material segments. It is an elective component of the consolidated financial statements.

This Standard applies to all parent entities that are required to prepare consolidated financial statements under section 290 of the HGB or section 11 of the PublG, or that do so voluntarily – and voluntarily supplement their consolidated financial statements by segment reporting, regardless of their sector.

Segmentation is based on the group’s operating segments defined using the management approach. Segmentation is therefore based on the group’s internal decision-making and reporting structure.

If the internal decision-making and reporting structure consists of several segmentations, group management shall opt for the segmentation that is primarily used for management when deciding on the segment reporting.

Operating segments that share the same economic characteristics may be aggregated.

An operating segment, including after aggregation with other operating segments, if applicable, is always a reportable segment if its revenue or similar income from external customers and other segments, segment profit or loss, or segment assets account for at least 10% of the corresponding total amount.

In line with the management approach, segment reporting must adopt the methods and carrying amounts applied to the internal reporting that is primarily used by group management to manage the group.

If group management uses more than one measure of segment profit or loss and of a segment’s assets and liabilities, the amounts primarily used by group management to manage the segments must be used.

A group must disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which the group and its segments engages and the economic environments in which it operates.

All reportable segments must be described. This description must include the characteristics used for defining the segments and the criteria applied to any decision to aggregate operating segments.

The recognition and measurement principles for segment reporting must be explained.

The Standard stipulates various quantitative disclosures for each reportable segment. In addition, the segment reporting must contain a reconciliation of the total amounts to the corresponding line items in the consolidated balance sheet and the consolidated income statement and, in the case of segment profit or loss, to the net income/net loss for the financial year or an appropriate subtotal in the consolidated income statement. Material reconciling items must be explained.

The principle of consistency may only be breached in exceptional cases and must be justified. If prior-year items are reported, they must be adjusted and disclosed both ‘as reported’ and ‘adjusted’.

If a group has changed the structure of its internal organisation in a manner that causes the composition of its reportable segments to change, of if a group changes the nature of its internal management indicators, or the way in which they are determined, this must be reflected accordingly in the segment reporting.

The requirements of this Standard must be applied to the preparation of the segment reporting for the first time in financial years beginning after 31 December 2020. Parent entities that have previously prepared segment reporting that does not comply with this Standard should disclose this fact when this Standard is applied for the first time.