Segment reporting is a method used by companies to present financial information about different segments of their business. This type of reporting is useful for companies that have diversified operations in various industries, as each industry segment may have different growth potentials, capital requirements, and profitability characteristics.
The objective of segment reporting is to provide financial statement users with more detailed information about a company's past performance and future prospects, as well as to allow for a more thorough analysis of the company's financial statements.