Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

16   ASC 280 SEGMENT REPORTING

Perspective and Issues

Subtopic

Overview

Benefits

Management Approach

Practice Alert

Definitions of Terms

Concepts, Rules, and Examples

Applicability of ASC 280

Operating Segments

Reportable Segments

Revenue test

Profit and loss test

Assets test

Comparability

75% Test

Example of segment testing

Aggregating Segments

Measurement Issues

Transfer Pricing

Common Costs

General Corporate Expense

Corporate Assets

Segment Disclosures

Entity-Wide Disclosures

Products and services

Geographic areas

Major customers

Restatement of Previously Reported Segment Information

Comprehensive Illustration

Other Sources

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 ...