Section 21 - Segment Reporting

Question 1

What is Segment Reporting based on?

Answer 1

Management approach

Question 2

A segment is reportable if it contributes to at least 10% of the total for all segments of one or more of the following…

Answer 2

1) Revenue
2) Assets
3) Profits

Question 3

What are the Reportable Segment?

Answer 3

> = 10%

a) Operations in different industries (Test #1, 2, 3) - Meet any of 3 tests, disclose ALL 3
b) Foreign Operations (geographical areas) (Test #1, 3) - Meet any one, disclose ALL 3
c) Major customer or Export Sales (Test #1) - Meet, disclose ONLY 1

Question 4

What are the three tests?

Answer 4

1) Revenue
2) Profit/Loss
3) Asset

Question 5

Does the Revenue Test include intercompany/intersegment sales and transfers?

Answer 5

Yes

Question 6

How do you calculate the Profit/Loss Test?

Answer 6

Combine Operating Profit and Loss of all segments and 10% of the higher profit or loss.

Question 7

What costs are included and excluded in the Profit/Loss Test?

Answer 7

-Include allocated common costs

• Excludes Corporate level expenses
  
  • Interest
  • Income taxes
  • Extraordinary items/ gains/loss from discontued ops