Reference no: EM132817395

Advanced Accounting

Part I - Answer the following questions based on the material in Chapter 12 | Segment Disclosures and Interim Financial Reporting. Please cite where you obtained your answers.

1. What is an operating segment? What is a reportable segment according to FASB ASC 280? Describe each of the quantitative thresholds that are used in determining what operating segments are also reportable segments? How are the segments that are not reportable segments handled in the required disclosures of FASB ASC 280?

2. Why do you think financial analysts are interested in segment disclosures?

3. Describe what is meant by the "management approach" to the disclosure of operating segments.

4. Under what conditions can two or more operating segments be aggregated for purposes of disclosure?

5. Assume that an enterprise has ten operating segments. Of these, five segments qualify as reportable segments by passing one of the 10% tests. However, their combined revenues from sales to unaffiliated customers total only 70% of the combined unaffiliated revenues from all operating segments. Should the remaining five operating segments be aggregated and shown as an "other segments" category? Explain.

6. What disclosures are required for the reportable segments and all remaining segments in the aggregate?

7. Describe the "once in-always in" provision of FASB ASC 280.

8. When is an enterprise required to include information in its financial statements about its foreign and domestic operations? What are the materiality tests used to determine reportable foreign operations?

9. What are the required disclosures regarding external customers? Must a customer be identified by name?

10. Under what conditions must an enterprise provide information about products and services? About geographic areas? What information must an enterprise report by geographic area?

11. Describe the overriding philosophy for interim financial reporting.

12. Do the requirements of FASB ASC 280 apply to financial statements for interim periods? If so, how?

13. Describe the minimum financial information to be disclosed in interim reports under FASB ASC 270.

14. How is revenue recognized on an interim basis?

15. Explain how a company estimates its annual effective tax rate for interim reporting purposes. Describe the accrual of income taxes for interim reporting periods.

16. What is the difference between the integral theory and the discrete theory with respect to interim financial reporting?

17. Are companies allowed to estimate inventories and gross profit for interim financial statements? Inventories are generally reported at the lower of cost or market. How is this rule implemented for interim financial statements?

18. Describe, in general, the way in which costs that benefit more than one interim reporting period should be handled.

19. Why does FASB ASC 270-10-45-11 require companies to disclose the seasonal nature of their business?

20. Describe how the changes to accounting principles are handled for interim reporting periods.

Part II - Go to your assigned corporation's website (see below) and access their latest annual report, along with the quarterly reports for that same year to answer the following questions.

1. Find the company's segment disclosure footnote. What are the company's business segments? Are the operating segments based on product/industry, geographic, or some other groupings?

2. Examine the segment disclosure footnote totals for revenues, profits, and assets. Do they agree with the totals reported in the consolidated financial statements? Which two segments have the highest revenue, are the most profitable, and have the most assets?

3. How significant is intersegment revenue? From this analysis, is the company primarily horizontally or vertically integrated, or a conglomerate?

4. What geographical area provides most of the company's revenues, profits, and assets? Would you consider it a multinational corporation? Why or why not?

5. Assess the seasonal nature of the company's revenue and income for the company as a whole and by operating segment.

6. Assess the company's profitability by quarter and by operating segment.

7. Is there a major customer disclosure? If so, highlight what is disclosed.

8. Qualitatively, do you consider the company's segment reporting to be adequate? What additional information or details would you like to see disclosed regarding its segments?

9. Determine whether you believe the company should attempt to expand its operations in a particular region of the world to increase net operating revenues and operating income.

10. Using the segment disclosure footnote, complete Problem 31 in Chapter 12 of the Textbook for YOUR company for the last fiscal year (not Disney for 2017).

Attachment:- Advanced Accounting.rar