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Struggling with segment reporting? Relief may be coming

Tammy Whitehouse | August 20, 2018

Long a thorn in the side of preparers and regulators alike, segment reporting rules may finally be getting a tune-up designed to make compliance more straightforward.

Accounting Standards Codification Topic 280 on segment reporting tells companies they must give investors some insight into how the company parses out different operating segments depending on how they manage the business. If a company manages its affairs in segments of some kind—perhaps by product or brand, by location or geographic region, or by division or subsidiary, for example—then it must report those segment results to investors accordingly.

The rules are not terribly prescriptive about how a company should identify its segments and separately report those results, says Angela Newell, national assurance partner at BDO USA. “This is one of the few areas of GAAP that is written for the management approach,” she says. “There are few bright lines other than to...

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