IFRS 8 para 22(aa), judgements applied in aggregating segments, including economic indicators

Syngenta AG – Financial report – 31 December 2019

Industry: manufacturing

Notes to the Syngenta AG Group Consolidated Financial Statements (extract)

4. Segmental breakdown of key figures for the years ended December 31, 2019 and 2018 (extract)

As further described in Note 2, Syngenta has adopted new segment reporting in 2019. Segment reporting for 2018 has been restated accordingly. There are five operating segments consisting of the Crop Core, Professional Solutions, Field Crops, Vegetables and Flowers businesses. These have been aggregated into the global Crop Protection reporting segment, consisting of Crop Core and Professional Solutions, and the global Seeds reporting segment, consisting of Field Crops, Vegetables and Flowers. Aggregation is based on internal management structures and underlying economic similarity. Crop Core and Professional Solutions have been aggregated because the similarities in their products, production processes, distribution methods and regulatory environments are much more significant than the differences in the market segments to which their respective customer bases sell, and they each have similar economic performance. Field Crops, Vegetables and Flowers have been aggregated because the extensive similarities which each of these businesses has with the others in their products and customers, their production and distribution processes and the regulatory environment for their products are much more significant than their respective differences, which relate to regulatory processes for GM traits used in certain Field Crops products and to the differences in a proportion of their respective customer bases. Also, the economic performance of these businesses is expected to be similar. Segment performance is managed based on segment operating income before restructuring costs and divestments, which is the measure of segment profit or loss presented, and is based on the same accounting policies as consolidated operating income.

Transactions between segments are generally priced based on the third party selling prices achieved by the purchasing segment less an allowance for selling and distribution profit margins for the purchasing segment.