FAR 21 - SEGMENT REPORTING Flashcards

1
Q

What method is used in segment reporting to help define what consititues as a “segment”?

A

The method under ASC 280 is called

Management Approach

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2
Q

Reportable Segment > 10%

Three Categories

A
  1. Operations in Different Industries
    • Test #1,2,3; Meet any of 3, disclose ALL 3
  2. Foreign Operations
    • Test #1 & 3; Meet any 1, disclose ALL 3
  3. Major Customer or Export Sales
    1. Test # 1; Meet, Disclose only 1
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3
Q

Three Test for Report Segments

>= 10%

A
  1. Revenue greater than or equal to 10%
    • INCLUDES Intercompany sales
  2. Operating Profit/Loss >= 10%
    • EXCLUDES Corporate level Expenses & Discontinued Operations.
      • Interest Cost
      • Income Taxes
  3. Segments Asset Test >= 10% Identifiable Assets
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4
Q

75% Test

A

There must be enough segments separately reported so that at least 75% of unaffiliated revenues (to outsiders) is hown by reportable segments. If the 75% test is not satisfied, additional segments must be designated as reportable (even if doesnt meet the 3 tests) until test is satisfied.

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