Segment reporting consists in:
A) Breaking down the earnings of the firm into the various functional components of its generation process.
B) Breaking down the earnings of a firm into the elements traceable to identifiable components of the business entity defined around markets,technologies or regions.
C) Reporting the three consolidated financial statements of a group plus,separately,those of each of its key subsidiaries.
D) Reporting the accrual-based earnings and the cash flows by structuring them by term.

Question

Quizplus · Accepted Answer

Segment reporting involves breaking down a company's earnings into identifiable components based on markets, technologies or regions, which helps users of financial statements to better understand the company's performance and risks associated with each segment. Option A refers to functional reporting which is a different concept. Option C is incorrect as it deals with reporting of consolidated financial statements and their subsidiaries separately. Option D refers to reporting of financial statements based on accruals and cash flows by structuring them by term, which is another distinct concept.

Segment Reporting Consists In