Segment Reporting, written by Allen I. Schiff, Jonathan B. Schiff and Cheri R. Mazza, explains and analyzes the disclosure and reporting requirements of FASB Statement of Financial Accounting Standards No. 131 (SFAS 131), Disclosures About Segments of an Enterprise and Related Information, and discusses other applicable pronouncements and the related accounting and reporting requirements of the U.S. Securities and Exchange Commission (SEC).
This Portfolio illustrates and analyzes key issues in segment reporting, including analyzing segment ratio using the accrual and cash flow ratio, utilizing segment and entity data to analyze the purchase and subsequent performance of an acquired segment, and reporting segments in the management disclosure and analysis section of the annual report.
This Portfolio summarizes the history of segment reporting and compares and contrasts SFAS 131 with international accounting guidance on segment reporting. An example illustrating disclosures under IASB International Accounting Standard 14, Segment Reporting, IAS 14 (rev.) is provided.
In addition, Segment Reporting discusses considerations—including available educational materials and segment report workpaper and schedules—for external and internal auditors.
Examples of segment reporting from the financial statements of various companies are analyzed. In addition, detailed analysis and worksheets illustrate and highlight contemporary reporting practices and auditing issues, including:
Segment Reporting allows you to benefit from:
This Portfolio is included in the Accounting Policy & Practice Series, a comprehensive series of titles which explain, explicate, and offer commentary on a wide range of accounting and financial management topics, including revenue recognition, income taxes, leasing, business combinations, debt instruments, risk management, internal controls and more.
Detailed Analysis
I. Introduction and Scope of Portfolio
A. In General
B. History of Segment Reporting
II. Reporting and Disclosure of Segments Under U.S. Accounting Standards
A. The Advent of SFAS 131
B. Scope
C. Objectives
D. Summary of SFAS 131
E. Identifying Operating Segments
F. Reportable Segments
1. Reportable Segments Without Aggregation
2. Reportable Segments Resulting From Aggregation
3. Quantitative Thresholds
4. Minimum Number of Segments Presented
5. Changes in Classification of a Segment
6. Maximum Number of Segments Presented
G. Disclosure Required for Reportable Segments
1. General Information
2. Information About Profit or Loss
3. Information About Assets
4. Measurement of Segment Profit or Loss and Assets
5. Reconciliations
6. Interim Period Information
a. Users Needs for Quarterly Segment Reporting
b. SFAS 131 Requirements
c. Interim Reporting Examples
7. Restatement of Previously Reported Information
H. Enterprise-Wide Disclosures
1. Information About Products and Services
2. Information About Geographic Areas
3. Information About Major Customers
I. Illustration of the Application of SFAS 131-IBM Corporation
J. Commentary on Specific Issues
1. Criticisms of the Management Approach and the Lack of Guidelines for the Measurement of Segment Profit or Loss and Assets
2. Profit or Loss and Asset Measurements that Could be Used by the CODM
3. Transfer Pricing
III. Illustrations and Analysis of Key Issues in Segment Reporting
A. Segment Ratio Analysis-Accrual and Cash Flow Ratio
B. Utilizing Segment and Entity Data to Analyze the Purchase and Subsequent Performance of an Acquired Segment
1. Background
2. Segment Information
3. Derived Measures of Profitability and Asset Efficiency
4. Concluding Discussion and Assessment
C. Reporting of Segments in the Management Disclosure and Analysis Section of the Annual Report
1. History of Requirement
2. Sample Disclosures
3. Reportable Segments
4. Summary
D. Issues of Consistency and Reporting for Decision Making and Evaluation
1. Briggs & Stratton Corp.
2. Caterpillar Inc.
IV. Auditor Considerations
Introductory Material
A. History
B. Analysis of Interpretation
C. Specific Guidance for the Preparer Community
1. Available Educational Material
2. Segment Reporting Workpaper and Schedules
a. Basic Facts
b. Additional Information
c. Analysis
V. International Segment Reporting
A. Effective Dates
B. Scope of Analysis
C. IFRS 8
1. Development of IFRS 8
2. Main Features of IFRS 8
a. Scope
b. Required Information
3. Interim Financial Reporting
D. IAS 14 (rev.)
1. Basic Approach of IAS 14 (rev.)
2. Illustration: Roche Group
E. Domestic and International Standards Compared
1. IFRS 8 Compared With SFAS 131
2. IAS 14 (rev.) Compared With SFAS 131
Working Papers
TABLE OF WORKSHEETS
Worksheet 1 Segment Reports IBM Corporation and Subsidiary Companies
Worksheet 2 Segment Reporting: Lucent Technologies
Worksheet 3 Segment Reports: Cooper Tire and Rubber Company Management's Discussion and Analysis
Worksheet 4 Motorola Corporation Management's Discussion and Analysis on Segment Reporting
Worksheet 5 Segment Report: Briggs & Stratton Corporation
Worksheet 6 Segment Reports Caterpillar Inc.
Worksheet 7 Example of Preparing Financial Statements by Segment
Worksheet 8 Summary and Critique of SFAS 14
Worksheet 9 Roche Group Segment Reports
Worksheet 10 Examples of Interim Segment Reports
Worksheet 11 Illustration of Current Professional Financial Analysts and Institutional Investor Concerns About Segment Reporting
Worksheet 12 Excerpts from IAS 14(rev.): Segment Reporting
Worksheet 13 List of Significant Accounting Pronouncements Principally Discussed
Worksheet 14 IFRS 8, Operating Segments
Worksheet 15 Guidance From IASB on Implementing IFRS 8, Operating Segments
Worksheet 16 Segment Reporting
Bibliography
OFFICIAL
Securities and Exchange Commission:
SEC Regulations
American Institute of Certified Public Accountants Materials:
Accounting Principles Board Opinions
Statement on Auditing Standards
Financial Accounting Standards Board Materials:
Statement of Financial Accounting Standards
International Accounting Standards Committee Materials:
UNOFFICIAL
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