Exam 7: Segment and Interim Reporting

Question

Explain what an operating segment is. For each of the examples below, determine what operating segments the company has and why. a. A beverage company sells beer, wine, and bottled water. The beer and wine are sold through liquor store outlets and directly to restaurants. The bottled water is sold to retailers. b. A company sells leather apparel. The company designs, manufactures, and retails these goods through its own retail outlets. There are primarily three divisions: (1)designing and sourcing and purchasing various raw materials; (2)manufacturing; and (3)distribution and retail. The design and raw materials flow through to the manufacturing division. All output of the manufacturing division is transferred to the distribution and retail division. Only the distribution and retail division has external revenues. The other divisions have internal revenues only. c. A drug company researches, manufactures, and distributes its drugs to pharmacies and hospitals in Canada, the United States, and Australia. It currently manufactures three drugs. Two of these drugs treat diabetes, and one drug is used to treat arthritic pain. The company has a fourth drug that is in phase three of the research process, awaiting final approval. This drug will also be used to treat pain, but mainly headache pain.

Setting the Stage

Intercorporate Equity Investments: an Introduction

Business Combinations

Appendix A: AIncome Tax Allocation

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Consolidation of Non-Wholly Owned Subsidiaries

Appendix A: Step Purchases

Appendix B: Decreases in Ownership Interest

Subsequent-Year Consolidations: General Approach

Appendix A: Preferred and Restricted Shares of Investee Corporation

Appendix B: Intercompany Bond Holdings

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Financial Reporting for Not-For-Profit Organizations

Appendix A: Fund Accounting

Public Sector Financial Reporting

Filters