Final answer:
In financial reporting for a business, a segment needs to be at least 10% of certain financial measures like revenue, profits, or assets to be significant enough for separate disclosure. This 10% threshold provides transparency and a clear understanding of a company's financial health to investors and stakeholders.
Step-by-step explanation:
To be significant enough to be reported on, a segment in a business context must meet certain thresholds. Specifically, a segment must represent at least 10% of a particular measure, such as revenue, profits, or assets, in order to be considered significant in financial reporting. This significance level is often used to determine whether a part of a business is large enough to require separate disclosure in financial statements for the benefit of investors and stakeholders.
For example, if a business has multiple operating segments, each must be reviewed to see if it meets the 10% threshold when compared to the company's overall figures. Factors like total revenue, profit, or assets are considered, and if any segment accounts for 10% or more of these factors, it must be reported individually in the financial statements. This threshold ensures transparency and provides a clearer understanding of where a company's financial health stands.