Segment Reporting Flashcards

1
Q

When Segment reporting is required?

A

When

  1. Multiple business lines
  2. Multiple product lines OR;
  3. Multiple geographical areas
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are characteristics of a segment?

A
  1. It engages in business activities from which it may earn revenues and incur expenses.
  2. Operating results are reviewed by the organization’s chief operating decision-maker (CODM/CEO) AND;
  3. Financial Information is available.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is an example o cost center but not Segment?

A
  1. HR departments

2. IT departments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a test for a segment

A
  1. It must meet the 10% Size test OR

2. 75% Reporting test

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is 10% size test

A
  1. Segment revenue is equal to 10% or more of the combined company revenue.
  2. The segment’s reported “Profit or Loss” is 10% or more of the GREATER of (absolute amount):
    - The combined reported loss of all operating segments reported profits or losses.
  3. The segment assets make up at lease 10% of the total combined assets of all operating segments.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is 75% reporting Sufficiency test

A

Total consolidated revenue of operating segment report less than 75% of consolidated revenue. Additional Operational segments will need to be reportable segments until at least 75% of revenue is included in reportable segments.

  1. Keep adding until achieve 75%
  2. Up to 10 reportable segments, when reach 10 determine whether adding more segment is necessary (cost constraints).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are required segment reporting?

A
  1. Offered products and services
  2. Geographic areas
  3. Largest clients or customers
  4. Financial information for the segment.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the other information to be included in Segment Reproting?

A
  1. Factors used to identify reportable segments
  2. The types of products and services sold by each segment.
  3. The basis of organization
  4. Revenues
  5. Interest Expense
  6. Depreciation and Amortization
  7. Material Expense items
  8. Equity method interest in other entities
  9. Income tax expense or income
  10. Other material non-cash itmes
  11. Profit or Loss
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Revenues from Customers are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Revenues from other segments are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Directly traceable expenses are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Interest Revenues are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Interest Expenses are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Depreciation and Amortization are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Equity in Net Income of Investee (under equity method) are Included or excluded?

A

Should be Included

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Significant noncash items are Included or excluded?

A

Should be Included

17
Q

Income Taxes are Included or excluded?

A

Should be Excluded

18
Q

General corporate revenues are Included or excluded?

A

Should be Excluded

19
Q

General corporate expenses are Included or excluded?

A

Should be Excluded

20
Q

Equity in earnings and losses of an unconsolidated subsidiary is Included or excluded?

A

Should be Excluded

21
Q

Gains and Losses from discounted operations are Included or excluded?

A

Should be Excluded

22
Q

Noncontrolling Interest is Included or excluded?

A

Should be Excluded

23
Q

CLUES to SUCCESS for Segment Reporting?

A
  1. Applying the 10% revenue test
  2. Applying the 10% Profit/Loss test
  3. Applying the 10% Asset test
  4. Applying the 75% sufficiency test
  5. Items included/excluded from the segment.