UBI Banca Group

14.4 Segment reporting
Segment reporting is defined as the manner in which financial information on a company is
reported by operating segment.
An operating segment is intended as a component of an entity:
• that engages in business activities that generate revenues and expenses;
• whose operating results are reviewed regularly by the entity’s chief operating decision
maker, to make decisions about the resources to be allocated to the segment and
assess its performance; and
• for which discrete financial information is available.
Segment reporting is based on elements that senior management uses to make operating
decisions (a “management approach”) and consequently the identification of operating
segments is performed on the basis of the current system of reporting to management which is
based primarily on management analysis of legally recognised entities.
Segment reporting is completed by information on the geographical areas in which revenues
are produced and assets are held.
14.5 Revenues
14.5.1 Definition
Revenues are the gross inflow of economic benefits resulting from business arising from the
ordinary operating activities of a company when these inflows create an increase in equity
other than an increase resulting from payments made by shareholders.
14.5.2 Recognition criteria
Revenues are measured at the fair value of the consideration received or due and are
recognised when they can be reliably estimated.
The result of the rendering of services can be reliably estimated when the following conditions
are met:
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits arising from the transaction will flow to the
company;
• the stage of completion of the operation as at the reporting date can be measured reliably;
• the costs incurred, or to be incurred, to complete the transaction can be measured
reliably.
Revenue recognised in return for services rendered is recognised by reference to the stage of
completion of the transaction.
Revenue is only recognised when it is probable that the economic benefits arising from the
transaction will be enjoyed by the company. Nevertheless when the recoverability of an
amount already included within revenues is uncertain, the amount not recoverable or the
amount for which recovery is no longer probable is recognised as a cost instead of adjusting
the revenue originally recognised.
Revenue arising from the use by third parties of the company’s assets which generate interest
or dividends are recognised when:
• it is probable that the economic benefits arising from the transaction will be received by
the company;
• the amount of the revenue can be reliably measured.
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