What is segment reporting?
A segment is a part of a company that its top decision maker reviews on its own. US accounting rules call that person or group the chief operating decision maker, or CODM.[S1]
Segment reporting gives revenue and a profit measure for each reportable segment. It shows the business the way management runs it.[S1]
How does a company choose its segments?
It starts from what the CODM reviews. Similar segments may be combined, then size thresholds decide which are reported.[S1]
Segments can follow products, regions, regulation or a mix.[S1] Apple's CODM is its CEO, and its segments are regions.[S4] Its page shows Americas: 42.9% (1 of 5 segments) (FY2025).
What did the 2023 update add?
The accounting update ASU 2023-07 did not change how segments are chosen. It added:[S1]
- Significant segment expenses regularly given to the CODM, every quarter and year.
- The CODM's title and position, and how the CODM uses the profit measure.
- The same disclosures for a company with only one segment.
It applies to fiscal years beginning after Dec 15, 2023. Quarterly reports follow from fiscal years beginning after Dec 15, 2024.[S1]
Where do you find it in a 10-K?
Item 1, Business, describes the business.[S5] SEC rules ask it to focus on the dominant segment or each reportable segment.[S2]
The segment numbers sit in a note to the audited financial statements, in Item 8.[S5] In Apple's fiscal 2025 10-K it is Note 13.[S4] See how to read a 10-K.
Why can a company's segments change?
A company that reorganizes may change its segments. Earlier periods are then recast onto the new segments, unless that is impracticable.[S1]
Microsoft moved to two segments for fiscal 2027. On Oct 28, 2026 it filed earlier results recast to match.[S3] It said the recast had no impact on its consolidated income statements.[S3] Its page shows Agents and Infra: 80.8% (1 of 2 segments) (FY2026, recast to the two FY2027 segments).