Segment and Interim Reporting

Question 1

What is interim reporting?

Answer 1

Short term financial statements for periods less than 1 year

Question 2

What is the discrete view?

Answer 2

Interim period is a separate accounting period; not GAAP

Question 3

What is the integral view?

Answer 3

Interim period is a part of the annual period; GAAP

Question 4

How are discontinued operations and unusual/infrequent items treated in interim reporting?

Answer 4

Aren’t prorated; fully recognized in interim period as incurred.

Question 5

How is inventory valued in interim reporting?

Answer 5

If inventory experiences a decline in value during an interim period, the loss is recognized in the interim period; however; if the loss is expected to be temporary, no loss is recognized

Question 6

When is segment reporting required?

Answer 6

It is required by all publicly traded companies.

Question 7

What is the test of significant for a segment?

Answer 7

• Revenue of segment is 10% or more of total
• Profit is 10% or more of total
• Segment assets are 10% or more of total

Question 8

How many requirements must a segment meet for it to pass the test of significance?

Answer 8

Must meet 1 of the requirements of: 10% revenue, 10% profit, 10% assets

Question 9

What is the 75% test?

Answer 9

All segment revenues must equal 75% of total external revenues.

Question 10

What disclosure requirements are there for segment reporting?

Answer 10

If 10% or more of enterprise revenue comes from one customer, the segment making the sales must be disclosed.