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Flashcards in Segment Reporting Deck (12)
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1

3 Basic Disclosures

how reportable segments were identified
whether they aggregated
description of products and services

2

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

3

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

4

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

5

Operating profit and loss includes

unaffiliated revenues
intersegment revenues
minus
all operating expenses

6

What approach is used in reporting segments?

Management approach

based on the way management organizes segments internally to make operating decisions and assess performance

7

purpose of segment reporting

to asses the future potential of an enterprise

8

Segments can be done by

products or services
geography
legal entity
type of customer

9

Segment reporting does not apply to

non profit organizations
non public enterprises
joint ventures

10

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

11

IFRS segment reporting

10% threshold same as GAAP
uses management approach

12

Enterprises wide disclosures are needed for

products and services
geographic areas-domestic and foreign ops
major customers