Which of the following statements is true about operating segments?

The correct statement regarding operating segments is that discreet financial information must be available for performance assessment. This aligns with the requirements set out by accounting standards such as IFRS 8 and ASC 280, which dictate that an entity must disclose information about its reportable segments, enabling users of financial statements to assess the nature and financial effects of the business activities in which it engages.

Having distinct financial data for each operating segment allows management to evaluate the performance and make informed decisions. This requirement ensures transparency and enhances the usefulness of financial reports, as stakeholders can see how each segment contributes to the overall financial health of the organization.

In contrast, the other statements do not accurately reflect the characteristics or requirements of operating segments. They cannot be evaluated solely based on profit margins, as performance could also be assessed based on revenue, return on assets, or other financial metrics. Additionally, while segments may operate independently, they do not do so without any oversight from corporate management, which typically has a strategic role in guiding and evaluating performance. Finally, operating segments can be comprised of single or multiple business activities, meaning that they do not always consist of multiple activities. The focus is more on how they are managed and reported rather than the number of activities involved.