Reportable segments: It is the process of deciding which operating segment is separately reportable and separate supplemental disclosures must be made. It is based on management’s classifications of each operating segment for internal evaluation ofthe financial position and operating performance of the enterprise. The FASB specified three 10 percent significance rules to determine which of the operating segments shall have separately reported information. The separate disclosures are required for segments meeting at least one of the following tests: The segment revenue, including both external sales and intersegment sales, is 10 percent or more. The absolute value of segment’s profit or loss is 10 percent or more. The segment’s assets are 10 percent or more of the total assets of all operating segments. The schedule showing appropriate tests to show countries using a 10 percent materiality threshold.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 13.7E

To determine

Reportable segments: It is the process of deciding which operating segment is separately reportable and separate supplemental disclosures must be made. It is based on management’s classifications of each operating segment for internal evaluation ofthe financial position and operating performance of the enterprise.

The FASB specified three 10 percent significance rules to determine which of the operating segments shall have separately reported information. The separate disclosures are required for segments meeting at least one of the following tests:

The segment revenue, including both external sales and intersegment sales, is 10 percent or more.

The absolute value of segment’s profit or loss is 10 percent or more.

The segment’s assets are 10 percent or more of the total assets of all operating segments.

The schedule showing appropriate tests to show countries using a 10 percent materiality threshold.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The proposed adaptation of prudential regulations known as Basel 3 proposes : a. to increase the quality of instruments eligible for capitalb. to introduce a leverage ratio complementary to the risk-adjusted solvency ratioc. to facilitate the exchange of information between national supervisors d. a and b

Which of the following statements are true about globaliza-tion methods? a. International licensing involves the creation of a new company that is owned by two or more firms from dif-ferent countries. b. Exporting involves contracts that allow a foreign com-pany to use a domestic company’s trademarks, patents, processes, or technology.c. Global sourcing involves the close coordination ofresearch and development, purchasing, marketing, andmanufacturing across national boundaries.d. A wholly owned international subsidiary is createdwhen a foreign government owns 100 percent of theequity in a U.S.-based firm.

Choose the correct. Which of the following statements is not true under U.S. GAAP?a. Operating segments can be determined by looking at a company’s organization chart.b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.