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Segment Reporting
An operating segment is a component of an enterprise: a. That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same enterprise), b. W hose operating results are regularly reviewed by the enterprise's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and c. F or which discrete financial information is available. Segment Reporting: Quantitative thresholds An enterprise shall report separately information about an operating segment that meets any of the following quantitative thresholds: a. Its reported revenue, including both sales to external customers and inter-segment sales or transfers, is 10 percent or more of the combined revenue, internal and external, of all operating segments. b. The absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount, of (1) the combined reported profit of all operating segments that did not report a loss or(2) the combined reported loss of all operating segments that did report a loss. c. Its assets are 10 percent or more of the combined assets of all operating segments. Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if management believes that information about the segment would be useful to readers of the financial statements. Operating profit or loss: Unaffiliated revenue and intersegment revenue minus all operating expenses. Common costs are operating expenses incurred by the enterprise for he benefit of more than one operating segment. Common costs are to be allocated to a segment if they are included in the measure of segment profit or loss used by the chief operating decision-maker. Number of segments–approximately 10 (as a rule of thumb. ) |