Segment Reporting

Question 1

A reportable operating segment is a component of an enterprise

Answer 1

That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same enterprise),

Whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and

For which discrete financial information is available.

Question 2

what are items that is required to be disclosed about reportable segments’ profit or loss

Answer 2

• Revenues from external customers
• Revenues from transactions with other operating segments of the same enterprise
• Interest revenue
• Interest expense
• Depreciation, depletion, and amortization expense
• Unusual items as described in FASB ASC 225-20
• Equity in the net income of investees accounted for by the equity method
• Income tax expense or benefit
• Significant noncash items other than depreciation, depletion, and amortization expense

-Rent expense and Cost of Goods Sold is not one of the items that requires disclosure.

Question 3

What FASB Section covers Segment Reporting

Answer 3

ASC 280

Question 4

The method used to determine what information to report for business segments is referred to as the

Answer 4

Management Approach

Question 5

two or more operating segments may be aggregated into a single operating segment if

Answer 5

all of the aggregation criteria are met,

Or if after performing the 10% test a majority of the aggregation criteria are met

Question 6

What would be a required enterprise-wide disclosure regarding external customers?

Answer 6

company receives 10% or more of its revenue from a single customer

Question 7

Enterprise-wide disclosures include disclosures about

Answer 7

products and services, geographic areas, and major customers

Question 8

The term chief operating decision maker

Answer 8

Refers to a Function

Question 9

What should not be included in Profits?

Answer 9

Common Costs