Which of the following is not a characteristic that defines a reportable operating segment according to U.S. GAAP?
A) Operating results are regularly reviewed by the enterprise's chief operating officer.
B) Discrete financial information is available.
C) Engages in business activities from which it may recognize revenues and incur expenses.
D) Represents more than 20% of total company revenues, assets, or net income.

Question

Quizplus · Accepted Answer

According to U.S. GAAP, a reportable operating segment is one that meets one or more of the following criteria: (1) its operating results are regularly reviewed by the enterprise's chief operating officer, (2) discrete financial information is available, and (3) it engages in business activities from which it may recognize revenues and incur expenses. The 20% threshold is not a requirement, but rather a factor that may be considered when determining reportable segments. Therefore, option D is not a defining characteristic of a reportable operating segment.

Which of the Following Is Not a Characteristic That Defines