Segment Reporting Flashcards
A reportable operating segment is a component of an enterprise
That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same enterprise),
Whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
For which discrete financial information is available.
what are items that is required to be disclosed about reportable segments’ profit or loss
- Revenues from external customers
- Revenues from transactions with other operating segments of the same enterprise
- Interest revenue
- Interest expense
- Depreciation, depletion, and amortization expense
- Unusual items as described in FASB ASC 225-20
- Equity in the net income of investees accounted for by the equity method
- Income tax expense or benefit
- Significant noncash items other than depreciation, depletion, and amortization expense
-Rent expense and Cost of Goods Sold is not one of the items that requires disclosure.
What FASB Section covers Segment Reporting
ASC 280
The method used to determine what information to report for business segments is referred to as the
Management Approach
two or more operating segments may be aggregated into a single operating segment if
all of the aggregation criteria are met,
Or if after performing the 10% test a majority of the aggregation criteria are met
What would be a required enterprise-wide disclosure regarding external customers?
company receives 10% or more of its revenue from a single customer
Enterprise-wide disclosures include disclosures about
products and services, geographic areas, and major customers
The term chief operating decision maker
Refers to a Function
What should not be included in Profits?
Common Costs
