Note 3  Segment reporting  (i) Operating segments  Internal transactions  employment related costs of central support functions  (service areas), income tax expense and certain distributions  attributable to non controlling interests (NCI) and holders of  loan capital. For internal reporting and risk management purposes, the  Consolidated Entity is divided into six operating groups and a  corporate group. These segments have been set up based  on the different core products and services offered. Segment  information has been prepared in conformity with the  Consolidated Entity’s segment accounting policy.  All transactions and transfers between segments are  determined on an arm’s length basis and are included within  the relevant categories of income. These transactions  eliminate on aggregation/consolidation. Below is a selection  of the key policies.  Macquarie Funds Group  is the Consolidated Entity’s funds  management business. It is a full-service asset manager,  offering a diverse range of capabilities and products  including investment management, infrastructure and real  asset management and fund and equity based structured  products.  Corporate and Asset Finance  is the lending and leasing  business of the Consolidated Entity.  Group Treasury has the responsibility for managing funding  for the Group and Operating Groups obtain their funding  from Group Treasury. The interest rates charged by Group  Treasury are determined by the currency and term of the  funding and are fully costed.  Internal funding arrangements  Generally, Operating Groups may only source funding  directly from external sources when there is recourse only to  the assets being funded and not to the Group.  Banking and Financial Services Group  is the primary  relationship manager for the Consolidated Entity’s retail client  base. The group brings together the retail banking and  financial services businesses providing a diverse range of  wealth management products and services to financial  advisers, stockbrokers, mortgage brokers, professional  service industries and the end consumer.  Deposits are a funding source for Macquarie. Banking and  Financial Services receives a deposit premium from Group  Treasury on deposits they generate. This deposit premium is  included within net interest and trading income for segment  reporting purposes. Macquarie Securities Group  activities include institutional  and retail derivatives, structured equity finance, arbitrage  trading, synthetic products, capital management, collateral  management and securities borrowing and lending. It is a  full-service institutional cash equities broker in the Asia  Pacific region and South Africa, and offers specialised  services in other regions. It also provides an equity capital  markets service through a joint venture with Macquarie  Capital.  During the year ended 31 March 2014, Group Treasury  revised internal funding transfer pricing arrangements relating  to Banking and Financial Services’ deposit and lending  activities. Comparative information presented in this  document has been restated to reflect the current  methodology.  Macquarie Capital  comprises the Consolidated Entity’s  corporate advisory, equity underwriting and debt structuring  and distribution businesses, private equity placements and  principal products.  Operating Groups that enter into arrangements with other  Operating Groups must do so on commercial terms. There is  a requirement for accounting symmetry in such transactions.  Fixed Income, Currencies and Commodities  provides a  variety of trading, research, sales and financing services  across the globe with an underlying specialisation in interest  rate, commodity and foreign exchange related institutional  trading, marketing, lending, and clearing or platform  provision.  Internal transactions are recognised in each of the relevant  categories of income and expense as appropriate.  Transactions between Operating Groups  Internal management revenue/charges  Internal management revenue/charges are primarily used to  recognise an Operating Group’s contribution to income tax  expense and benefits. Non-assessable income generated by  an Operating Group results in management revenue added  to that group’s operating result. Conversely a non-deductible  expense results in a management charge to the operating  result. These internal management revenue/charges are  offset by an equal and opposite amount recognised in the  Corporate segment such that on aggregation the total nets  to nil.  Corporate  is not considered an operating group and  includes head office and central support functions including  Group Treasury. The Corporate segment also holds certain  investments not aligned with any of the Operating Groups.  Items of income and expense within the Corporate segment  include the net impact of managing liquidity for Macquarie,  earnings on capital, non-trading derivative volatility, earnings  from investments, unallocated head office costs and  117 