Chapter 16ASC 280 SEGMENT REPORTING

PERSPECTIVE AND ISSUES

   Subtopic

   Overview

   Practice Alert

DEFINITIONS OF TERMS

CONCEPTS, RULES, AND EXAMPLES

   Applicability of ASC 280

   Operating Segments

   Reportable Segments

   Measurement Issues

   Segment Disclosures

   Entity-Wide Disclosures

   Restatement of Previously Reported Segment Information

PERSPECTIVE AND ISSUES

Subtopic

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.

Overview

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:

  1. Better understand the enterprise's performance
  2. Better assess its prospects for future net cash flows
  3. Make more informed ...

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