FASB Wants Public Companies for Segment Reporting Study
Marking the first phase of its segment reporting outreach, the Financial Accounting Standards Board (“FASB”) is requesting that public companies participate in a study to improve U.S. GAAP guidance regarding the aggregation of operating segments and the reportable segments method. Specifically, the FASB wants public companies to share how they apply the criteria under FASB Accounting Standards Codification (“ASC”) 280, Segment Reporting, and how two alternatives would impact how their financial statements are presented. One alternative involves reorganizing the process for deciding which operating segments are reported and moving the quantitative thresholds for reportable segments to an earlier stage of. Read More.
FASB Progresses on Segment Reporting Project
At a June 13 meeting on the Financial Accounting Standards Board’s (“FASB”) segment reporting project, the board gave staff members permission to proceed with their upcoming extended outreach. The extended outreach would address two alternatives: Reorganize the process for determining reportable segments and shift the quantitative thresholds earlier in the process; and Eliminate the aggregation criteria, making each operating segment reportable until a practical limit is achieved. The decision to perform extended outreach focus on both alternatives occurred after board members agreed that feedback on each alternative would benefit future discussions. Board members had also considered solely focusing on the. Read More.
FASB to Revisit Segment Reporting Standard
As investors and analysts’ frustrations continue over segment reporting, the Financial Accounting Standards Board (“FASB”) plans to improve the consistency and application of its guidance. The FASB wants to amend Accounting Standards Codification (“ASC”) 280, Segment Reporting, which requires businesses to disclose information regarding management’s decision-making process and methods for reviewing segment performance. The standard also lists disclosure requirements on products and services, geographic regions, and a company’s top customers. Investors complain that the standard’s disclosure requirements can be excessively wide-ranging. They also say that the current guidance forces companies to group too many operating units, which makes it difficult. Read More.