F2M4 Flashcards
Objective of segment reporting
to provide information on the business activities and the economic enviornment to help users of the financial statements
Required disclosures of segement reporting
- operating segments
- products and services
- geographic areas
- Major customers
Accoutning principles segement reporting
should be the same in the segment and consolidated
Intercompany transactions are ___ for segment reporting
not eliminated
Segment reporting applies to
public companies only
Operating segment characteristics
component of an entity
engages in business activity
regularly reviewed by CODM
discrete financial information
TRACEABLE CASH FLOWS
Example of non operating segments
corporate or pension planes
10% segment reporting test
to be significant enough to segment, must be 10% of
- combined revenues (intersegment or affiliate customers)
- operating profit
- Identifiable assets
of the total consolidated
75% reporting sufficiency
if you have some segments, segments must be created to cover 75%
can be internal or external
‘all other segments’ details
if you reach 75% threshold, you can COMBINE and DISCLOSE the rest in ‘all other segments’
Comparative reporting (segment reporting)
if there was a segment in the immediately preceding period that is no longer a segment, CODM can choose to segment it
Determining segment profit or loss formula
Revenue
less:directly traceable costs
Less: reasonably allocated costs
Are income and expenses allocated to a segment
no, unless management says so
Segment disclosures
- identifying factors (location, product and service, regulatory enviornments)
Product and Service Segment disclosures
revenue from external customers
interest rev/exp
depreciation
internal transactions
sigificant noncash items
Measurement criteria
