Description
Segment information should be prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the enterprise as a whole.
Segment Accounting Policies
Segment information should be prepared in conformity with the accounting policies
adopted for preparing and presenting the financial statements of the enterprise as a whole.
There is a presumption that the accounting policies that the directors and management of
an enterprise have chosen to use in preparing the financial statements of the enterprise as
a whole are those that the directors and management believe are the most appropriate for
external reporting purposes. Since the purpose of segment information is to help users of
financial statements better understand and make more informed judgments about the
enterprise as a whole, this Statement requires the use, in preparing segment information,
of the accounting policies adopted for preparing and presenting the financial statements
of the enterprise as a whole. That does not mean, however, that the enterprise accounting
policies are to be applied to reportable segments as if the segments were separate stand-
alone reporting entities. A detailed calculation done in applying a particular accounting
policy at the enterprise-wide level may be allocated to segments if there is a reasonable
basis for doing so. Pension calculations, for example, often are done for an enterprise as a
whole, but the enterprise-wide figures may be allocated to segments based on salary and
demographic data for the segments.
This Statement does not prohibit the disclosure of additional segment information that is
prepared on a basis other than the accounting policies adopted for the enterprise financial
statements provided that
(a) the information is reported internally to the board of directors and the chief executive
officer for purposes of making decisions about allocating resources to the segment and
assessing its performance and
(b) the basis of measurement for this additional information is clearly described.
Assets and liabilities that relate jointly to two or more segments should be allocated to
segments if, and only if, their related revenues and expenses also are allocated to those
segments.
The way in which asset, liability, revenue, and expense items are allocated to segments
depends on such factors as the nature of those items, the activities conducted by the
segment, and the relative autonomy of that segment. It is not possible or appropriate to
specify a single basis of allocation that should be adopted by all enterprises; nor is it
appropriate to force allocation of enterprise asset, liability, revenue, and expense items
that relate jointly to two or more segments, if the only basis for making those allocations
is arbitrary. At the same time, the definitions of segment revenue, segment expense,
segment assets, and segment liabilities are interrelated, and the resulting allocations
should be consistent. Therefore, jointly used assets and liabilities are allocated to
segments if, and only if, their related revenues and expenses also are allocated to those
segments. For example, an asset is included in segment assets if, and only if, the related
depreciation or amortization is included in segment expense.
doc_823935030.docx
Segment information should be prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the enterprise as a whole.
Segment Accounting Policies
Segment information should be prepared in conformity with the accounting policies
adopted for preparing and presenting the financial statements of the enterprise as a whole.
There is a presumption that the accounting policies that the directors and management of
an enterprise have chosen to use in preparing the financial statements of the enterprise as
a whole are those that the directors and management believe are the most appropriate for
external reporting purposes. Since the purpose of segment information is to help users of
financial statements better understand and make more informed judgments about the
enterprise as a whole, this Statement requires the use, in preparing segment information,
of the accounting policies adopted for preparing and presenting the financial statements
of the enterprise as a whole. That does not mean, however, that the enterprise accounting
policies are to be applied to reportable segments as if the segments were separate stand-
alone reporting entities. A detailed calculation done in applying a particular accounting
policy at the enterprise-wide level may be allocated to segments if there is a reasonable
basis for doing so. Pension calculations, for example, often are done for an enterprise as a
whole, but the enterprise-wide figures may be allocated to segments based on salary and
demographic data for the segments.
This Statement does not prohibit the disclosure of additional segment information that is
prepared on a basis other than the accounting policies adopted for the enterprise financial
statements provided that
(a) the information is reported internally to the board of directors and the chief executive
officer for purposes of making decisions about allocating resources to the segment and
assessing its performance and
(b) the basis of measurement for this additional information is clearly described.
Assets and liabilities that relate jointly to two or more segments should be allocated to
segments if, and only if, their related revenues and expenses also are allocated to those
segments.
The way in which asset, liability, revenue, and expense items are allocated to segments
depends on such factors as the nature of those items, the activities conducted by the
segment, and the relative autonomy of that segment. It is not possible or appropriate to
specify a single basis of allocation that should be adopted by all enterprises; nor is it
appropriate to force allocation of enterprise asset, liability, revenue, and expense items
that relate jointly to two or more segments, if the only basis for making those allocations
is arbitrary. At the same time, the definitions of segment revenue, segment expense,
segment assets, and segment liabilities are interrelated, and the resulting allocations
should be consistent. Therefore, jointly used assets and liabilities are allocated to
segments if, and only if, their related revenues and expenses also are allocated to those
segments. For example, an asset is included in segment assets if, and only if, the related
depreciation or amortization is included in segment expense.
doc_823935030.docx