ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 13.2.4E
To determine
Introduction: Segment reporting is when a company operates various businesses in various geographical areas or have different segments of one business in similar area, then segment reporting is mandatory as per ASC280. In this, company have to report various segments income, expenses, assets, liabilities, etc.
The reporting of selected data of segment of a business if the revenue of the segment exceeds 10 percent.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Need an answer for question B (i ii iii)
(b) Obtain the most recent annual reports for TWO FTSE 100 companies of your choice (NOTE: you need to make sure the companies chosen have more than one operational segment and thus have meaningful segment notes for analysis). Examine the segmental disclosures provided in the segment notes of the annual reports by the selected two companies and comment on the following:i. Based on extracts from the segment notes,• how much and what segmental information is provided in the segment notes?• discuss whether the companies are in compliance with the relevant accounting standard, and• discuss the similarities and differences between their disclosure practices.
ii. Comment on whether the information is useful and sufficient to allow shareholders to make informed investment decisions
iii. Discuss the implications of your analysis and findings, such as policy implications.
(Segmented Reporting) Carlton Company is involved in four separate industries. The following information is available for each of the four industries.
Check the below image for information.
InstructionsDetermine which of the operating segments are reportable based on the:(a) Revenue test.(b) Operating profit (loss) test.(c) Identifiable assets test.
Statement 1: A research and development function could qualify as an operating segment
Statement 2: When applying the 75% revenue sufficiency test, the next largest operating segment shall always be selected.
Statement 3: Segment data may be aggregated if majority of the aggregation criteria are met.
Statement 4: Entity-wide disclosures are required by publicly held companies with more than one reportable segment.
a.
Only statement 1 is true
b.
Only statement 3 is untrue
c.
Only statement 4 is true
d.
All statements are untrue
e.
Only statement 2 is untrue
Chapter 13 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 13 - Prob. 13.1QCh. 13 - Prob. 13.2QCh. 13 - What are the three 10 percent significance tests...Ch. 13 - Prob. 13.4QCh. 13 - A company has 10 industry segments, of which the...Ch. 13 - Prob. 13.6QCh. 13 - Prob. 13.7QCh. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Prob. 13.13QCh. 13 - Prob. 13.14QCh. 13 - Maness Company made a change in accounting for its...Ch. 13 - Prob. 13.1CCh. 13 - Prob. 13.2CCh. 13 - Prob. 13.3CCh. 13 - Prob. 13.7CCh. 13 - Prob. 13.8CCh. 13 - Prob. 13.9CCh. 13 - Reportable Segments Data for the seven operating...Ch. 13 - Prob. 13.2.1ECh. 13 - Prob. 13.2.2ECh. 13 - Prob. 13.2.3ECh. 13 - Prob. 13.2.4ECh. 13 - Prob. 13.2.5ECh. 13 - Prob. 13.2.6ECh. 13 - Prob. 13.2.7ECh. 13 - Prob. 13.2.8ECh. 13 - Prob. 13.2.9ECh. 13 - Prob. 13.2.10ECh. 13 - Prob. 13.2.11ECh. 13 - Prob. 13.3.1ECh. 13 - Prob. 13.3.2ECh. 13 - Multiple-Choice Questions on Interim Reporting...Ch. 13 - Prob. 13.3.4ECh. 13 - Prob. 13.3.5ECh. 13 - Prob. 13.3.6ECh. 13 - Prob. 13.3.7ECh. 13 - Prob. 13.3.8ECh. 13 - Prob. 13.3.9ECh. 13 - Prob. 13.3.10ECh. 13 - LIFO Liquidation During July, Laesch Company,...Ch. 13 - Inventory Write-Down and Recovery Cub Company, a...Ch. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.2ECh. 13 - Prob. 13.6.3ECh. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.5ECh. 13 - Prob. 13.6.6ECh. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13PCh. 13 - Prob. 13.14PCh. 13 - Interim Income Statement Chris Inc. has...Ch. 13 - Prob. 13.17PCh. 13 - Prob. 13.20PCh. 13 - Matching Terms Match the items in the left-hand...
Knowledge Booster
Similar questions
- It is possible for segments to qualify as reportable, but not represent a material portion of the enterprise. What test is applied to ensure the segments reported represent a significant portion of enterprise activity? a.Total internal and external segment revenue exceeds 75% of total consolidated revenue. b.Total segment assets of the reportable segments exceeds 75% of total consolidated assets. c.Total external segment revenue of the reportable segments exceeds 75% of consolidated revenue. d.Combined external segment revenues for reportable segments exceed 75% of internal and external segment revenues.arrow_forwardWhich of the following is not required for segment reporting? Reconciliation of reported segment items to consolidated financial statement items Identification of key members of the management team for each segment Explanation of basis for determining segments Description of the products and services that generate revenue for each segmentarrow_forwardI/IVA Corp. operates in eight geographical areas offering five major types of products and services. Internal reports are structured based on the major types of products and services. How should HOPE corp. identify its reportable segments for external reporting in accordance with PFRS 8? Based on the eight geographical areas. Based on the five products and services Based on quantitative threshold. Based on the operating results of either the geographical areas or the products and services.arrow_forward
- (Segment Reporting—Theory) The following article appeared in the Wall Street Journal.Washington—The Securities and Exchange Commission staff issued guidelines for companies grappling with the problem of dividing up their business into industry segments for their annual reports.An industry segment is defined by the Financial Accounting Standards Board as a part of an enterprise engaged in providing a product or service or a group of related products or services primarily to unaffiliated customers for a profit.Although conceding that the process is a “subjective task” that “to a considerable extent, depends on the judgment of management,” the SEC staff said companies should consider . . . various factors . . . to determine whether products and services should be grouped together or reported as segments.Instructions(a) What does financial reporting for segments of a business enterprise involve?(b) Identify the reasons for requiring financial data to be reported by segments.(c) Identify…arrow_forwardSegment reporting deals with in-detail segment-wise financial reporting in the financial statements of the company. What are the specific segments? What does each segment contribute to the total company income and profits?arrow_forwardQuestion 1 A) The following segment information relates to Tolkein Enterprises: IMAGE 1 Applying the tests for identifying a reportable segment in accordance with AASB 8, which of the above segments qualify for reporting and do the segments satisfy the 75 per cent test? mechanical engineering and retailing, 75 per cent test satisfied; industrial manufacturing, mechanical engineering and retailing, 75 per cent test satisfied; project consulting, mechanical engineering and retailing, 75 per cent test satisfied; industrial manufacturing, project consulting, mechanical engineering and retailing, 75 per cent test satisfied; B) IMAGE 2 Richmond Ltd has the following potential ordinary shares on issue as at 30 June 2009: The closing price for Richmond Ltd shares on 30 June 2009 was $3.35 and the average share price for the period was $3.20. What is the total number of shares deemed issued for no consideration for all of above potential ordinary shares that is in accordance with AASB…arrow_forward
- Segment Reporting To provide information that can be used to evaluate _____ and ______ across different lines of business and in different parts of the world, Multinational Corporations (MNCs) disaggregate consolidated totals and provide disclosures on a segment basis. This information may also be used to assess how __________ an MNC is. Fill in the spaces?arrow_forwardanswer for question A Segment disclosures are widely regarded as some of the most useful disclosures in financial reports because of the extent to which they disaggregate financial information into meaningful and often revealing groups. A) Discuss the objectives of segmental information and the requirements for the disclosure of segmental information in annual reports.arrow_forwardA central issue in reporting on industry segments of a business enterprise is the determination of which segments are reportable. Required: A. What is a reportable segment B. Explain how a preparer would determine which operating segments to report segment information for. C. What types of segment information must be reported?arrow_forward
- Two or more operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, and the segments are similar in which of the following respects: I. the nature of the products and services II. the nature of the production processes III. the type or class of customer for their products and services IV. the methods used to distribute their products or provide their services V. if applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilitiesarrow_forwardAn operating segment is a component of an entity: a. That engages in business activities from which it may earn revenue and incur expenses b. Whose operating results are regularly reviewed by the entity’s chief operating decision maker c. For which discrete information is available d. All of the choices characterize an operating segmentarrow_forwardEffect of Industry Characteristics on Financial Statement Relations. Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations between various financial statement items provide evidence of many of these economic characteristics. Exhibit 1.22 (pages 6061) presents common-size condensed balance sheets and income statements for 12 firms in different industries. These common-size balance sheets and income statements express various items as a percentage of operating revenues. (That is, the statement divides all amounts by operating revenues for the year.) Exhibit 1.22 also shows the ratio of cash flow from operations to capital expenditures. A dash for a particular financial statement item does not necessarily mean the amount is zero. It merely indicates that the amount is not sufficiently large enough for the firm to disclose it. Amounts that are not meaningful are shown as n.m. A list of the 12 companies and a brief description of their activities follow. A. Amazon.com: Operates websites to sell a wide variety of products online. The firm operated at a net loss in all years prior to that reported in Exhibit 1.22. B. Carnival Corporation: Owns and operates cruise ships. C. Cisco Systems: Manufactures and sells computer networking and communications products. D. Citigroup: Offers a wide range of financial services in the commercial banking, insurance, and securities business. Operating expenses represent the compensation of employees. E. eBay: Operates an online trading platform for buyers to purchase and sellers to sell a variety of goods. The firm has grown in part by acquiring other companies to enhance or support its online trading platform. F. Goldman Sachs: Offers brokerage and investment banking services. Operating expenses represent the compensation of employees. G. Johnson Johnson: Develops, manufactures, and sells pharmaceutical products, medical equipment, and branded over-the-counter consumer personal care products. H. Kelloggs: Manufactures and distributes cereal and other food products. The firm acquired other branded food companies in recent years. I. MGM Mirage: Owns and operates hotels, casinos, and golf courses. J. Molson Coors: Manufactures and distributes beer. Molson Coors has made minority ownership investments in other beer manufacturers in recent years. K. Verizon: Maintains a telecommunications network and offers telecommunications services. Operating expenses represent the compensation of employees. Verizon has made minority investments in other cellular and wireless providers. L. Yum! Brands: Operates chains of name-brand restaurants, including Taco Bell, KFC, and Pizza Hut. REQUIRED Use the ratios to match the companies in Exhibit 1.22 with the firms listed above.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning