Chapter 15. Segment Reporting
Definitions of Terms
- chief operation decision maker
The person or group responsible for making decisions about resource allocations to business segments, as well as the evaluation of those segments.
- operating segment
A component of a business entity that earns revenues and incurs expenses, for which financial information is available, and about which the chief operating decision maker (see preceding definition) makes decisions regarding resource allocations and performance assessments.
- segment
A distinct revenue-producing component of a business entity, for which separate financial information is produced internally, and whose results are regularly reviewed.
- segment manager
That person who is accountable to the chief operating decision maker (see preceding definition) for a segment’s operating results, financial results, forecasts, and plans.
Concepts and Examples
Segment information is required only for public companies. It is reported in order to provide the users of financial information with a better knowledge of the different types of business activities in which a company is involved. This information would otherwise be hidden in the consolidated financial information that a company normally releases in its financial statements.
The determination of a segment is based on how ...
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