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Reportable Segments

A central issue in reporting on operating segments of a business enterprise is the determination of which segments are reportable.

INSTRUCTIONS

1. What are the tests to determine whether or not an operating segment is reportable?

2. What is the test to determine if enough operating segments have been separately reported upon, and what is the guideline on the maximum number of operating segments to be shown?

Solution Preview

1. What are the tests to determine whether or not an operating segment is reportable?

Operating segments are components of an enterprise which meet three criteria

1. Engage in business activities and earn revenues and incur expenses.
2. Operating results are regularly reviewed by the chief operating decision-maker to assess performance and make resource allocation decisions.
3. Discrete financial information is available ...

Solution Summary

The solution explains the tests to determine the reportable segments for a business.

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