Segment Reporting Flashcards
3 Basic Disclosures
how reportable segments were identified
whether they aggregated
description of products and services
Other disclosures
Should be reviewed by the chief operating officer
revenues from external customers
intersegment revenues
interest revenue and expense - should be separate
unless this composes the majority revenue
depreciation, depletion, amortization
More disclosures
Should be reviewed by the COO
unusual items, extraordinary
equity in net income of the investee
income tax expense/benefit
significant non cash items
Reportable segments
10%
Total Revenues
Operating profit and loss
Identifiable assets
Total of all revenues of the reported segments should be at least 75% of total unaffiliated revenues
Not to exceed 10 segments
Operating profit and loss includes
unaffiliated revenues
intersegment revenues
minus
all operating expenses
What approach is used in reporting segments?
Management approach
based on the way management organizes segments internally to make operating decisions and assess performance
purpose of segment reporting
to asses the future potential of an enterprise
Segments can be done by
products or services
geography
legal entity
type of customer
Segment reporting does not apply to
non profit organizations
non public enterprises
joint ventures
What business entities should have enterprise wide disclosures?
enterprise-wide disclosures are to be reported by
all public business enterprises,
including those with a single reportable segment
because the criteria are met for splitting the enterprise into reportable segments
IFRS segment reporting
10% threshold same as GAAP
uses management approach
Enterprises wide disclosures are needed for
products and services
geographic areas-domestic and foreign ops
major customers
