ASBJ 17
Accounting Standard for Disclosures about Segments of an Enterprise
Accounting Standard for Disclosures about Segments of an Enterprise is part of the Japan GAAP framework.
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Conceptual Framework Linkage
Segment disclosure as management actually sees the business
ASBJ Statement No. 17 requires disclosure of FINANCIAL information about an entity's OPERATING SEGMENTS – organised around a "MANAGEMENT APPROACH": segments are identified based on the entity's OWN INTERNAL organisational structure, the way MANAGEMENT actually allocates resources and evaluates PERFORMANCE – rather than an EXTERNALLY imposed, standardised industry classification. This lets readers see the business through the SAME lens management itself uses.
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Scope
Companies with publicly traded securities preparing consolidated (or individual) financial statements
This Statement applies to companies (typically LISTED companies) with PUBLICLY TRADED securities, requiring segment disclosure as part of their FINANCIAL statements.
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The Management Approach – Segments as Management Sees Them
Identified by internal reporting structure, not external classification
Operating segments are identified based on COMPONENTS of the entity for which SEPARATE FINANCIAL information is available and REGULARLY REVIEWED by the entity's CHIEF OPERATING DECISION-MAKING body (typically the board of directors or an equivalent senior management group) for the purpose of ALLOCATING resources and ASSESSING performance – a genuinely MANAGEMENT-DRIVEN identification process, MOVING AWAY from the OLDER approach of segmenting purely by RISK-AND-REWARD industry/geographic categories.
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Identifying Reportable Segments – the Quantitative Thresholds
The 10% test, applied across revenue, profit/loss, or assets
An operating segment is a "REPORTABLE SEGMENT" requiring separate disclosure if it meets AT LEAST ONE of several QUANTITATIVE thresholds – generally, its REVENUE, its PROFIT OR LOSS (in absolute terms), or its ASSETS represent10% OR MOREof the COMBINED total for all operating segments – broadly MIRRORING IFRS 8's own 10% quantitative thresholds internationally.
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Required Segment-Level Disclosures
Revenue, profit/loss, assets, and other measures used by management
Disclosure itemDescription
Segment revenueSplit between external customers and intersegment transactions
Segment profit or lossMeasured on the SAME basis management itself uses internally
Segment assetsIf regularly reported to the chief operating decision-making body
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Reconciliation to Consolidated Totals
Bridging segment totals back to the consolidated financial statements
Because segment measures are based on MANAGEMENT's own internal reporting (which may use DIFFERENT accounting policies or allocation methods than the CONSOLIDATED financial statements), a RECONCILIATION is required, bridging the TOTAL of all reportable segments' revenue, profit/loss, and assets BACK to the corresponding CONSOLIDATED financial statement totals, identifying and explaining any MATERIAL reconciling items.
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Entity-Wide Disclosures – Products, Geography, and Major Customers
Additional disclosures required regardless of segment structure
EVEN where an entity has only a SINGLE reportable segment, certain ENTITY-WIDE disclosures are still required: revenue from EXTERNAL customers by MAJOR product/service category; revenue and non-current assets by GEOGRAPHIC area; and information about SIGNIFICANT reliance on any SINGLE external customer (generally where revenue from one customer represents 10% or more of total revenue).
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Worked Example – Applying the 10% Reportable Segment Threshold
Determining which segments must be separately reported
Example: A company with four operating segments
A company's four operating segments report revenue of ¥600,000,000, ¥250,000,000, ¥90,000,000, and ¥60,000,000 respectively (total: ¥1,000,000,000).
The 10% threshold = ¥100,000,000. Segments 1 (¥600,000,000, 60%) and 2 (¥250,000,000, 25%) EXCEED the threshold and must be SEPARATELY reported. Segments 3 (¥90,000,000, 9%) and 4 (¥60,000,000, 6%) FALL BELOW the threshold – though they may still be VOLUNTARILY disclosed separately, or COMBINED into an "all other segments" category.
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Worked Example – a Segment Reconciliation
Bridging internal management figures to the consolidated total
Example: Reconciling segment profit to consolidated profit
The total of all reportable segments' profit is ¥180,000,000. Consolidated profit before tax is ¥165,000,000, with the ¥15,000,000 difference arising from unallocated corporate expenses not attributed to any segment.
The company discloses the RECONCILIATION: ¥180,000,000 (total segment profit) LESS ¥15,000,000 (unallocated corporate expenses) =¥165,000,000(consolidated profit before tax) – clearly explaining the NATURE of the reconciling item.
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Disclosure Requirements
What ASBJ Statement No. 17 requires
Basis for identifying operating segments and the measurement basis for segment profit/lossSegment revenue, profit/loss, assets, and reconciliation to consolidated totalsEntity-wide disclosures on products, geography, and major customer reliance
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Critical Judgments
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Identifying the entity's chief operating decision-making body and its actual internal reporting structureWhether to aggregate similar operating segments into a single reportable segment
SIGNIFICANT ESTIMATES
Generally minimal – this Statement is primarily a disclosure standard reflecting management's own internal figures
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Relationship to IAS/IFRS
Comparison – J-GAAP vs IFRS 8
FeatureJ-GAAP (ASBJ Statement No. 17)IFRS (IFRS 8)
Segment identification approachManagement approachManagement approach – converged
Quantitative thresholds10% of revenue, profit/loss, or assets10% of revenue, profit/loss, or assets – converged
This is one of the MOST genuinely converged standards in the J-GAAP suite – ASBJ Statement No. 17 was developed AS PART of the joint ASBJ/IASB convergence project SPECIFICALLY to align with IFRS 8's management approach, itself based on the equivalent US GAAP standard.
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Statement Mapping
Where every segment disclosure lands
EventStatement(s) affectedNotes
Segment informationNotes onlyNo effect on the primary financial statement figures themselves
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Related Standards
Cross-reference map
StandardConnection
ASBJ Statement No. 22Consolidated Financial Statements – supplies the consolidated totals segment figures reconcile to
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Quick-Reference Glossary
Management approach
Identifying operating segments based on an entity's actual internal organisational and reporting structure, as used by its chief operating decision-making body.
Reportable segment
An operating segment meeting at least one of the quantitative 10% thresholds (revenue, profit/loss, or assets), requiring separate disclosure.
Financial statement key (Japan GAAP terminology)
BSBalance Sheet (貸借対照表)P&LStatement of Income / Profit and Loss Statement (損益計算書)Net Assets純資産の部SCNAStatement of Changes in Net Assets (株主資本等変動計算書)SCFStatement of Cash Flows (キャッシュ・フロー計算書)