Overview

This Section establishes standards on how to define and disclose segments in a government's consolidated financial statements.

These standards apply to government financial statements. Other government organizations that apply the PSA Handbook are encouraged to provide the disclosures established in this Section when their operations are diverse enough to warrant such disclosures.  PS 2700 Segment disclosures is designed to separate out key financial information into segments in order to provide relevant information for accountability and decision making purposes.

A segment is a distinguishable activity or group of activities of a government for which it is appropriate to separately report financial information. Different bases of segmentation include:

• major functional classification of activities
• service line segments
• segments that reflect the different accountability and control relationship between the government and various organizations in the reporting entity.

Government financial statements should separately disclose the following information, in notes or schedules, about each of a government's segments identified:

• the basis for identifying segments, the nature of the segments and the activities they encompass, and the method of significant allocations to segments;
• segment expense by major object or category;
• segment revenue by source and type;
• the aggregate of the income of government business enterprises and government business partnerships accounted for under the modified equity method for each segment, if applicable; and
• a reconciliation between the information disclosed for segments and the consolidated information in the financial statements.

History of Section PS 2700

Note: The above summary does not include details of consequential amendments made as the result of other projects.