Which of the following is a provision of SFAS No. 131?
A)Segment liabilities must be reported, but reported segment assets is optional.
B)Reconciliation of segment profit or loss to consolidated profit of loss must be done before income taxes.
C)A segment is constituted by having 20% or more of combined revenue of all operating segments.
D)Segment reporting is based on the way management organizes the segments for making operating decisions and assessing performance.

Question

Quizplus · Accepted Answer

SFAS No. 131 requires segment reporting based on the way management organizes the segments for making operating decisions and assessing performance. Option A is incorrect because segment assets must be reported along with liabilities. Option B is incorrect because reconciliation of segment profit or loss to consolidated profit of loss must be done after income taxes. Option C is incorrect because the 20% threshold is not a requirement for constituting a segment.

Which of the Following Is a Provision of SFAS No