FAR-Segment Reporting
Reportable Segment
Operating segments of an enterprise that meet the criteria for separate reporting
Thresholds for Reportable Segments- "Reporting Sufficiency" Test
"Reporting Sufficiency" Test--75% If the total of external (consolidated) revenue reported by operating segments constitutes less that 75% of the external (consolidated) revenue, additional operating segments need to be identified as reportable segments, even if they do not meet the size tests until at least 75% of external revenue is included in reportable segments.
Thresholds for Reportable Segments--Size Test
1) Size Test 10% (Must meet only one a) Revenue=reported revenue is 10% or more of the combined revenue of all operating segments. b) Reported Profit/Loss= if the absolute amount of its reported profit or loss is 10% or more of: the combined reported profit/loss of all operating segments that did not report a loss c) Assets=10% or more of the combined assets of all operating segments
Operating Segment
A component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, results from which are regularly reviewed by the main decision maker, from which DISCRETE or traceable cash flow information is available.
