4.2 Segment Reporting
How to treat reported Revenue segment?
a reportable operating segment has revenue equal to 10% or more of the total combined revenue, internal and external, of all of the entity's operating segments.
How to treat geographic Revenue disclosure?
no percentage threshold is established for practicable disclosures of geographic information. Instead, an entity must disclose revenues attributable to all foreign countries in total. Separate disclosure of revenues from external customers attributed to a single foreign country is also required if those revenues are material.
How to treat general corporate expense?
The general corporate expenses are excluded from the calculation of the operating profit of a segment.
How to treat intersegment sales or transfer?
An operating segment of a business is considered reportable if its reported revenue, including sales to external customers and intersegment sales or transfers, is at least 10% of the combined revenue of all operating segments.
Opto Co. is a publicly traded, consolidated entity reporting segment information. Which of the following items is a required entity-wide disclosure regarding external customers?
Information about products and services and geographical areas is reported if it is feasible to do so. If 10% or more of revenues is derived from one external customer, (1) that fact, (2) the amount from each such customer, and (3) the segment(s) reporting the revenues must be disclosed.
Which items is a required entity-wide disclosure regarding external customers?
Information about products and services and geographical areas is reported if it is feasible to do so. If 10% or more of revenues is derived from one external customer, (1) that fact, (2) the amount from each such customer, and (3) the segment(s) reporting the revenues must be disclosed.
In external financial reporting of segment data, which of the following must be used to determine a reportable operating segment's profit or loss?
Segmentation for external reporting purposes is based on the structure of an entity's internal organization, that is, an alignment of external with internal reporting. Accordingly, the amount of a segment item reported, such as profit or loss, is the measure reported to the chief operating decision maker for purposes of making resource allocation and performance evaluation decisions regarding the segment. However, GAAP do not stipulate the specific items included in the calculation of that measure.
A measure of profit or loss and total assets must be disclosed for each reportable segment of an entity. If depreciation expense included in that measure is regularly provided to the segment's chief operating decision maker, it?
Must be separately disclosed. if the amounts are included in the measure of profit or loss reviewed by the chief operating decision maker or are otherwise regularly provided to that person, other required disclosures about each reportable segment include the following: (1) revenues from external customers and other operating segments, (2) interest revenue and expense, (3) depreciation, (4) depletion, (5) amortization, (6) unusual items, (7) equity in the net income of equity-based investees, (8) income tax expense or benefit, and (9) other significant noncash items.
Which types of entities are required to report on business segments?
Publicly traded entities. The FASB's authoritative guidance on segment disclosure applies to the interim financial reports and annual financial statements of public business entities. Ordinarily, information is to be reported on the basis that it is used internally for evaluating performance and making resource allocation decisions (the management approach). Disclosure is not required of information that is not prepared for internal use if reporting it would not be feasible.
Do profit and loss and total asset belong to operation segment?
An operating segment is a component (1) engaged in business from which it may earn revenues and incur expenses, (2) whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resource allocation and to assess performance, and (3) for which separate financial information is available. An operating segment is reportable if it meets one of the quantitative thresholds (revenue, assets, or absolute amount of profit or loss). Disclosures include a measure of profit or loss and total assets for each reportable segment.
How to distinguish reportable segments?
An operating segments have revenue equal to or greater than 10% of the total revenue of all operating segments. A segments has profit equal to or greater than 10% of the total profit. A segment have assets greater than 10% of the total assets. An operating segment is reportable if it meets one or more of the three tests.
Disclosures include ?
Disclosures include a measure of profit or loss and total assets for each reportable segment. Other items typically disclosed include revenues from external customers and other operating segments, interest revenue and expense, depreciation, depletion, amortization, unusual items, equity in the net income of equity-based investees, income tax expense or benefit, and other significant noncash items.
What GAAP define Revenue of operating segment?
GAAP do not specifically define the reported revenue of an operating segment. However, the information reported includes (1) revenues from external customers, (2) revenues from transactions with other operating segments of the same entity, and (3) interest revenue
The guidance on segment disclosure does not apply to?
The guidance on segment disclosure does not apply to (1) a parent, (2) a subsidiary, (3) an equity-method investee, or (4) a joint venture, if (a) its separate statements are also consolidated or combined, and (b) both sets of statements are in the same report.
