Which of the following is true concerning segment disclosures?
A) The European Union requires sales but not profit data by segments.
B) Forecasts based on consolidated data are more accurate than those based on segmented data due to intercompany transfers.
C) The U.S. requires extensive social disclosures of its segmented data.
D) The British require segment sales based on source but not destination.

Question

Quizplus · Accepted Answer

The European Union requires disclosure of both sales and profit data by segments.

Answer: B 
 Forecasts based on segmented data are typically considered more accurate as they allow for better understanding of performance and factors impacting it on a granular level. Intercompany transfers can be accounted for and adjusted for in segment reporting.

Answer: C 
 The U.S. requires disclosure of financial and descriptive information about a company's reportable segments, but does not require extensive social disclosures.

Answer: D 
 The British require segment sales to be reported based on both source and destination.

Which of the Following Is True Concerning Segment Disclosures