Operating segment definition
/What is an Operating Segment?
An operating segment is a component of an entity that is a profit center, that has discrete financial information available, and whose results are reviewed regularly by the entity's chief operating decision maker for purposes of performance assessment and resource allocation. An operating segment generally has a segment manager who is accountable to the chief operating decision maker for the results of the segment. This definition is used in the International Financial Reporting Standards.
An entity's corporate headquarters is not considered an operating segment, nor are an entity's post-employment benefit plans.
Example of Operating Segments
As an example of operating segments, Microsoft Corporation reports that it operates its business in five segments, which are as follows:
Windows and Windows Live Divisions
Server and Tools Division
Online Services Division
Microsoft Business Division
Entertainment and Devices Division