Description
Suppose that management is considering preparing segmented information but is
unsure on how to identify a segment and is unsure on why the information is
important. Outline a brief memo to management explaining the importance of
segmented information, and create an action plan on the main steps management
should take to identify a segment. Also, provide your opinion on the effect
segmented information will have on the company’s financial disclosure.
Explanation & Answer
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SURNAME 1
Student Name
Name of Instructor
Unit Code
Date
Memo
To: Managing Director
From: Student Name
Date: 2nd December 2016
Re: Implementation of Segmented Financial Reporting
According to the Financial Accounting Standards Board, the objective of
segmented reporting of financial statements and other required information is to
provide information about the different types of business activities in which a
public entity engages and the different economic environments in which it
operates. The information helps the users of financial statements to better
understand the public entity’s performance, better assess its prospects for future
net cash flows and make more informed judgments about the public entity as a
whole. FASB has made segmented reporting a necessity for companies with any
discernible operating segments. Seeing that our company is already divided into
operating segments by geographic location it is paramount that we comply with
these requirements. Aside from accounting requirements, segmented reporting
will be beneficial to the company in reducing fraud...