Intermediate Accounting 6e, Chapter 3 PPT.pptVIP

What Amounts Are Reported By An Operating Segment? General information about the operating segment. Segment profit or loss, segment assets, and the basis of measurement. Reconciliations of the totals of segment revenues, reported profit or loss, assets, and other significant items. Interim period information. Segment Reporting Reporting by Geographic Area GAAP requires an enterprise to report certain geographic information unless it is impracticable to do so. Information About Major Customers Revenues from customers generating 10% or more of the revenue of an enterprise must be disclosed. End of Chapter 3 Chapter 3: The Balance Sheet and Financial Disclosures Chapter 1 stressed the importance of the financial statements in helping investors and creditors predict future cash flows. The balance sheet, along with accompanying disclosures, provides relevant information useful in helping investors and creditors not only to predict future cash flows, but also to make the related assessments of liquidity and long-term solvency. The purpose of this chapter is to provide an overview of the balance sheet and financial disclosures and to explore how this information is used by decision makers. The purpose of the balance sheet, sometimes referred to as the statement of financial position, is to report a company’s financial position on a particular date. It is a freeze frame or snapshot of financial position at the end of a particular day marking the end of an accounting period. A limitation of the balance sheet is that assets minus liabilities, measured according to generally accepted accounting principles, is not likely to be representative of the market value of the entity. Many assets, like land and buildings, are measured at their historical costs rather than their market values. Relatedly, many company resources including its trained employees, its experienced management team, and its reputation are not recorded as assets at all. However, despite these limitations,