PERSPECTIVE AND ISSUES
ASC 280, Segment Reporting, has one subtopic:
- ASC 280-10, Overall, that provides guidance to public business entities on how to report certain information about
- Operating segments in complete sets of financial statements and in
- Condensed financial statements of interim periods issued to shareholders.
ASC 280 also requires public entities to disclose certain information about:
- Their products and services,
- The geographic areas in which they operate, and
- Their major customers.
Benefits. With many companies organized as conglomerates, the presentation of basic consolidated financial statements on an aggregated basis does not provide users with sufficient information for decision-making purposes. The objective of segment reporting, as set forth in ASC 280-10-1 is to
…Provide information about the different types of business activities in which an enterprise engages and the different economic environments in which it operates to help users of financial statements:
- Better understand the enterprise's performance
- Better assess its prospects for future net cash flows
- Make more informed ...