高级会计学(第10版)教师手册Beams10e_IM_10.pdf

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1、 2009 Pearson Education,Inc.publishing as Prentice Hall 155 Chapter 14 SEGMENT AND INTERIM FINANCIAL REPORTING Chapter Outline DISAGGREGATION A A companys financial information can be disaggregated to provide information useful to financial statement users in assessing managements effectiveness 1 Se

2、gment reporting discloses information in the same way management organizes the enterprise into units for internal decision making 2 Interim reporting provides timely information to financial statement users on a quarterly basis SEGMENT REPORTING A FASB Statement No.131,“Disclosures about Segments of

3、 an Enterprise and Related Information”is applicable to all public business entities that have issued debt or equity securities and are required to file financial statements with the SEC.1 Segments based on a management approach are called operating segments.a Pension and other postretirement benefi

4、t plans,and corporate headquarters or other functional departments are not operating segments.2 Segments may be either geographical or industry-related,based on internal company segmentation.3 Amounts reported in the financial statements are the amounts reported to the chief operating decision maker

5、.Internal allocations made to the operating segment are included in the segment reports.4 Segment reporting is required for interim reports as well as annual reports B Disclosures may appear within the body of the financial statements,in statement notes,or in separate schedules that are an integral

6、part of the financial statements.2009 Pearson Education,Inc.publishing as Prentice Hall 156 IDENTIFYING OPERATING SEGMENTS(Illustration 14-1)A An operating segment engages in business activity,has operating results regularly reviewed by the enterprises chief operating decision maker and has discrete

7、 financial information available.B Similar segments can be combined if they have similar economic characteristics and are similar in each of the following areas.The nature of their products and services The nature of the production process The type or class of customer The distribution method for th

8、e products or services The regulatory environment C Operating segments are reportable if they meet certain materiality thresholds.1 10%revenue test:The segments revenue is 10%or more of the combined revenue(including intersegment sales and transfers)of all operating segments.2 10%asset test:The segm

9、ents identifiable assets(those assets that are reviewed by the chief operating decision maker)are 10%or more of the combined identifiable assets of all operating segments.3 10%operating profit test:The segments operating profit or operating loss(in absolute amounts)is 10%or more of the greater(in ab

10、solute amounts)of(a)the combined operating profits of all industry segments that did not incur an operating loss,or(b)the combined operating loss of all industry segments that did incur an operating loss.D Reportable operating segments determined under the above tests must represent a substantial po

11、rtion of the enterprises operations.1 Reported segments must include 75%of all external revenue,including intersegment revenue.2 If not,additional segments must be identified as reportable.a This can be done by aggregating smaller segments that meet most of the aggregation criteria shown above.Other

12、wise segments that do not quite meet the 10%threshold must be determined reportable until the 75%criteria is met.2009 Pearson Education,Inc.publishing as Prentice Hall 157 E Required disclosures for each reportable operating segment includes:A measure of profit or loss Total assets Amount of revenue

13、 from unaffiliated customers Amount of revenue from affiliated customers Interest revenue Interest expense(If a segments revenues are primarily interest and the chief operating decision maker relies on net interest revenue to evaluate performance,the segment may report interest revenue net of intere

14、st expense.)Depreciation,depletion and amortization expense Unusual items(as described in APB Opinion No.31 paragraph 26)Equity in the net income of investees accounted for by the equity method Income tax expense or benefit Extraordinary items Significant noncash items other than depreciation,deplet

15、ion and amortization expense If reviewed by the chief operating decision maker,other items are required that may include:amount of investment in equity investments,the total expenditures for additions to long-lived assets other than financial instruments and certain other items,and deferred tax asse

16、ts RECONCILIATION OF SEGMENT INFORMATION A A reconciliation between the segment data and consolidated information must be provided for The total of reportable segments revenues to reported consolidated revenues The total reportable segments profit or loss to consolidated income before taxes(However,

17、if items like taxes and extraordinary items are included in segment profit or loss,segment profit or loss can be reconciled to consolidated income after these items are included.)Total reportable segments assets are reconciled to consolidated assets The total reportable segments amounts for every ot

18、her significant item of information disclosed with their corresponding consolidated amount ENTERPRISE WIDE DISCLOSURES A Enterprises also report limited information (if not otherwise reported as part of segment information)2009 Pearson Education,Inc.publishing as Prentice Hall 158 1 Products and Ser

19、vices:If practical,revenue from each product or service(or group of similar products or services)should be disclosed 2 Geographic Information:If practical,geographical information should include revenues from external customers in the enterprises home country and outside the home country.If the reve

20、nue from any one country is material(over 10%),this information should also be disclosed separately.Similar treatment is accorded long-lived assets.3 Major Customers:Disclosure of the existence of major customers(a single customer who accounts for 10%or more of the revenue)must be disclosed includin

21、g the amount of the revenue but not necessarily the identity of the customer.Groups under common control count as a single customer.However,different levels of government count as different entities.INTERIM FINANCIAL REPORTING A APB Opinion No.28,“Interim Financial Reports”covers interim reports whi

22、ch are more timely but less complete than annual financial statements 1 Guidelines apply to any publicly traded company that issues interim financial information to its security holders.2 Interim reports are usually unaudited,but the quarterly information in the annual report is“reviewed”by the CPA.

23、a Interim reports do not constitute fair presentations of financial information in conformity with GAAP 3 Each interim period is considered an integral part of each annual period(integral theory),rather than a basic accounting period unto itself(discrete theory).B Revenue is recognized when earned f

24、ollowing the same principles as used for the annual period.C Product costs 1 The gross profit method can be used for pricing interim inventories when a company does not use the perpetual inventory method and is too costly to perform an inventory count.The method must yield a reasonable estimate of i

25、nventory and cost of goods sold.2009 Pearson Education,Inc.publishing as Prentice Hall 159 2 Inventory market declines are not deferred unless considered temporary.3 If LIFO inventories are liquidated at an interim date but are expected to be replaced by year end,cost of sales should include the cos

26、t of replacing the LIFO base.The amount of current cost in excess of historical cost may be shown as a current liability on an interim balance sheet.4 Planned variances under a standard cost system that are expected to be absorbed by year-end are usually deferred at the interim date.D Expenses other

27、 than product costs 1 Annual expenses are usually allocated to the interim periods that are expected to be benefited.However,expenses of an interim period that would not be deferred at year end,are not deferred.2 Advertising costs are expensed in the interim period unless they clearly benefit subseq

28、uent interim periods.3 Income taxes for interim reporting are divided into a Taxes applicable to income from continuing operations before income taxes,excluding unusual or infrequently occurring items and b Taxes applicable to significant unusual or infrequently occurring items,discontinued items,an

29、d extraordinary items.4 Computation for income taxes in interim period:(Illustration 14-2)a The estimated effective annual tax rate is applied to taxable income from continuing operations excluding unusual and infrequently occurring items.b The year-to-date tax expense less the tax expense recognize

30、d in earlier interim periods is the tax expense for the current interim period.c Tax effects of unusual and infrequently occurring items are calculated separately and added to the tax expense of the interim period in which the items are reported.d Gains and losses on discontinued operations and extr

31、aordinary items are reported on a net-of-tax basis.2009 Pearson Education,Inc.publishing as Prentice Hall 160 E The minimum financial information to be disclosed in interim reports of publicly traded companies includes:Sales or gross revenues Provisions for income taxes Extraordinary items net of in

32、come taxes Cumulative-effect-type changes in accounting principles Net income Basic and diluted earnings per share Seasonal revenue,costs,or expenses Significant changes in estimates of income tax expense Disposal of a segment of a business,extraordinary items and unusual or infrequently occurring i

33、tems Contingent items Changes in accounting principles and estimates Significant changes in financial position When interim data are reported on regular basis,information should be reported for the current year to date,or the last twelve months to date with comparable information for the preceding y

34、ear.For each reportable operating segment:o Revenue from external customers o Intersegment revenue o A measure of segment profit or loss o Total assets if there has been a material change since the last annual report o A description of a change in segmentation since the last annual report o A reconc

35、iliation of total segment profits to total consolidated profits F When an enterprise regularly reports interim data,it must also report for the current year-to-date or the last 12 months to date,with comparable information for the preceding year.G SEC requires quarterly reports on Form 10-Q to be fi

36、led within 45 days after the end of the quarter.Additional information required by the SEC includes:1 Comparative consolidated balance sheets as of the end of the current quarter and at the prior year-end.2 Comparative consolidated income statements for the current quarter and the same quarter of th

37、e prior year,and the current year to date and the prior year-to-date.3 Comparative consolidated statements of cash flows for the current year to date and the prior year-to-date.2009 Pearson Education,Inc.publishing as Prentice Hall 161 Description of assignment material Minutes Questions(15)Exercise

38、s(10)E14-1 6 MC general questions(segments)16 E14-2 Viscloskyl Determine reportable segments from revenue tests and 25 prepare disclosure note E14-3 Superior Determine reportable segments 25 E14-4 Worldwide Prepare disclosures for domestic and foreign operations and 15 reconcile with consolidated re

39、venue E14-5 AICPA 7 MC problem-type questions(segments)35 E14-6 Nordgren 4 MC problem-type questions(domestic and foreign 20 disclosures)E14-7 4 MC general and problem-type questions(interim reports)15 E14-8 Endicott Determine net income for interim reports 15 E14-9 AICPA 5 MC problem-type questions

40、(interim reporting)25 E14-10 Trapper Determine LIFO inventory in first quarter report 10 Problems(8)P14-1 Woods Determine reportable segments from revenue test and 15 prepare disclosure note P14-2 Hawkeye Determine reportable operating segments 25 P14-3 Daton-Paulo Determine reportable segments on a

41、 geographic basis and 30 prepare disclosures P14-4 Mid-America Determine reportable segments and prepare schedules for 40 reporting by geographic operating segments P14-5 Random Choice Segment tests and disclosure schedules 50 P14-6 Truetest Prepare schedule for segment disclosures 40 P14-7 Colby Co

42、mputations for tests for operating segments and disclosure schedules 40 P14-8 Trotter Calculate estimated tax rate and prepare schedule of estimated 35 net income for each quarter Internet Assignment Using the H.J.Heinz website,obtain the most recent annual report and answer questions regarding the

43、companys segment disclosures.2009 Pearson Education,Inc.publishing as Prentice Hall 162 Illustration 14-1 TESTS FOR REPORTABLE INDUSTRY SEGMENTS REVENUE TEST Timber Mining Defense Finance Corporate Sales to unaffiliated customers$8,000$51,000$50,000 Sales to affiliates 2,000 5,000 Interest from nona

44、ffiliates$5,000$3,000 Total revenues$10,000$51,000$55,000$5,000$3,000 Test values:Timber$10,000 Mining 51,000 Defense 55,000 Finance 5,000 Total$121,000 x 10%=$12,100 test value Reportable industry segments:Mining and Defense 2009 Pearson Education,Inc.publishing as Prentice Hall 163 IDENTIFIABLE AS

45、SETS TEST Timber Mining Defense Finance Corporate Tangible assets excluding inter-segment loans$9,000$34,000$32,000$15,000$30,000 Goodwill 6,000 9,000 Intersegment loans 10,000 25,000 Total assets$9,000$50,000$41,000$40,000$30,000 Test values:Timber$9,000 Mining 50,000 Defense 41,000 Finance 40,000

46、Total$140,000 x 10%=$14,000 test value Reportable segments:Mining,Defense,Fnance 2009 Pearson Education,Inc.publishing as Prentice Hall 164 OPERATING PROFITS TEST Timber Mining Defense Finance Corporate Revenue(see revenue test)$10,000$51,000$55,000$5,000$3,000 Cost of sales:To unaffiliated customer

47、s (5,000)(25,000)(29,000)To affiliated customers (2,000)Allocated Expenses (1,000)(5,000)(7,000)Other expenses (4,500)(10,000)(9,000)(1,000)Interest expense to outsiders (1,000)(1,000)(1,000)Income from equity investee 1,000 20,000 Extraordinary Gain 6,000 Income(loss)$(2,500)$10,000$17,000$3,000$22

48、,000 Test values:Timber (only one with negative income)absolute value is$2,500,and the test value would be$250.Use the higher test value generated by segments with profits.Mining$10,000 Defense($17,000-$6,000 extraordinary gain)11,000 Finance 3,000 Totals$24,000 x .10 Test Value is$2,400 Reportable

49、industry segments:All segments 2009 Pearson Education,Inc.publishing as Prentice Hall 165 Illustration 14-2 ACCOUNTING FOR INCOME TAXES FROM CONTINUING OPERATIONS IN INTERIM STATEMENTS 1 Estimate an annual effective tax rate at the end of each quarter 2 Apply the annual effective tax rate to the inc

50、ome earned fox the year to date 3 Deduct the income tax reported in the previous interim reports from the income tax on the year-to-date income to determine the current quarters income tax.A company estimates a 30%effective income tax rate at the end of the first and second quarters.First Second Thi