beams11 ppt15 Modified you Essay

Chapter 12-15

Segment Credit reporting

to go with

Advanced Accounting, 11th edition

by Beams, Anthony, Bettinghaus, and Cruz

Copyright ©2012 Pearson Education,

Inc. Posting as Prentice Hall

15-1

Segment Revealing

Segment revealing under GAAP applies to general public

companies, we. e., all those listed companies that file

with the SECURITIES AND EXCHANGE COMMISSION'S or are delivering financial

assertions prior to real estate in a general public market.

Information must be reported for the main units

(segments) in which administration structured the

company intended for internal making decisions and

performance evaluation functions.

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Inc. Submitting as Prentice Hall

15-2

Segment Revealing: Objectives

1 . Understand how the management strategy

is used to identify potentially reportable

operating sections.

2 . Apply the tolerance tests to recognize

reportable operating segments: the revenue

test, the advantage test, as well as the operating revenue

test.

several. Apply the 75% external revenue test out to

determine whether additional segments

should be reported

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11-3

Segment Reporting: Targets (cont. )

4. Understand the types info that may be

revealed for sections and the factors that the

numbers of disclosure can vary across firms.

5. Know what segment disclosures are

reconciled to the consolidated amounts.

6. Know the types of enterprise-wide disclosures

related to products and services, geographic

areas of procedure, and key customers which might be

required to always be disclosed.

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15-4

Part Financial Confirming

1: REPORTABLE OPERATING

PORTIONS

ASC 280-10-05 TO fifty-five

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15-5

Operating Segments

According to GAAP, businesses that have publicly

traded financial debt or fairness instruments must report in

their business segments.

Revealing is based on the structure used by

management making decisions or assess

performance. For example ,

 in the event the company's inside reporting and

evaluation system is geographically based, the

section reporting can be geographically based.

 if the internal confirming and analysis system

can be product-line structured, the segment reporting can be

product-line structured.

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Operating Part (def. )

A component of any business enterprise

1 . Engages in organization activities

 Revenues and expenses tracked

 Intercompany amounts included

2 . Operating results are evaluated by key

operating decision maker

a few. Discrete economic information exists

Excludes monthly pension and post-retirement

plans, and general corporate and business

headquarters

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Incorporating Segments

Portions with similar economic

qualities may be merged.

 Product or service

 Creation processes

 Classes of customers

 Distribution systems

 Regulatory environment, if suitable

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15-8

Segment Financial Reporting

2: THRESHOLD TESTING

ASC 280-10-50-12

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Inc. Posting as Prentice Hall

15-9

Reportable Sections

Operating sections are reportable and

material if any of the three threshold tests

happen to be met

1 ) 10% Revenue test

2 . 10% Asset test

several. 10% Earnings or damage test

Sectors not meeting one of the three checks

are combined into one " all other" category.

A single additional test out to see if an adequate number

of segments had been identified

four. 75% ExternalCopyright

revenue

testEducation,

©2012 Pearson

15-10

Incorporation. Publishing since Prentice Hall

10% Income Test

Section reported earnings, including

intersegment revenues, can be 10% or maybe more of the

combined revenue of operating sectors.

 Combined includes " all other" category

...

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