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Which of the following factors determines whether an identified segment of an enterprise should be reported in the enterprise's financial statements under SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information?
1. The segment's assets constitute more than 10% of the combined assets of all operating segments.
2. The segment's liabilities constitute more than 10% of the combined liabilities of all operating segments.
Suggested Answer: B
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Choice 'B' is correct. If comparative FS are issued, restate prior year's FS. If comparative FS are not issued, restate prior year-end's retained earnings account by 'adjusting' (net of tax) the opening balance of the current retained earnings statement. Note that when an error is corrected, retroactive restatement is used, and when there is a change in accounting principle, retrospective restatement is done. However, this is only a difference in terminology.
39 comments · newest first
DA
Darrel
10 months ago
Nope, it's definitely both I and II!
PH
Phung
11 months ago
I thought it was just the assets that counted.
ME
Merri
11 months ago
Wait, are we sure it's both? Sounds too broad.
ST
Stefany
11 months ago
Definitely agree, both factors matter!
FE
Felix
11 months ago
I think both I and II are important for reporting.
LE
Leslie
12 months ago
I’m a bit confused; I thought it was just assets that mattered, but now I’m questioning if liabilities play a role too.
DO
Douglass
12 months ago
I’m leaning towards option C because I recall that both assets and liabilities are important for segment reporting under SFAS No. 131.
WA
Walker
12 months ago
I feel like we practiced a question similar to this, and it was about reporting segments based on their size relative to the whole.
HA
Hana
1 year ago
I think I remember that both assets and liabilities can be factors, but I'm not sure if they both need to be over 10%.
DA
Dalene
1 year ago
I've got a good feeling about this one. The key is understanding the 10% thresholds for both assets and liabilities.
CH
Charlie
1 year ago
I remember learning about segment reporting in class, but I'm drawing a blank on the specific criteria. Time to re-read the question closely.
MA
Margery
1 year ago
Okay, let me think this through step-by-step. I need to consider both the asset and liability thresholds.
ME
Melinda
1 year ago
Hmm, I'm a bit unsure about the details of SFAS No. 131. I'll need to review that standard carefully.
RO
Roslyn
1 year ago
This question seems straightforward, I think I can handle it.
JE
Jennie
1 year ago
The correct answer is C, no doubt about it. If you think about it, the enterprise needs to report on both the assets and liabilities of a segment to give a complete picture. Anything less would be like trying to bake a cake with just the flour or just the eggs - it's just not going to turn out right!
LA
Lavera
1 year ago
Yes, that makes sense. Reporting only one aspect wouldn't provide a clear picture of the segment's performance.
ER
Erick
1 year ago
So, the correct answer is C, both I and II.
LO
Lorita
1 year ago
Definitely, it's important to have a comprehensive view of the segment's financial position.
JA
James
1 year ago
I agree, the enterprise should report both the assets and liabilities of a segment for a complete picture.
AL
Alease
1 year ago
I'm going with C. After all, the question says 'determines whether an identified segment should be reported', and that means both assets and liabilities need to meet the 10% threshold.
AL
Alexia
1 year ago
User 3: C) Both I and II is the correct answer.
DE
Detra
1 year ago
User 2: I agree, both assets and liabilities need to meet the 10% threshold.
RO
Rosendo
1 year ago
User 1: I'm going with C.
SH
Sherly
1 year ago
C is the way to go! You can't just look at the assets or the liabilities, you need to consider both. It's like trying to balance a see-saw with just one side - it just won't work.
DA
Darnell
1 year ago
Both I and II.
MI
Miesha
1 year ago
II only.
TH
Theron
1 year ago
I only.
SH
Sherrell
1 year ago
C is the way to go! You can't just look at the assets or the liabilities, you need to consider both. It's like trying to balance a see-saw with just one side - it just won't work.
JA
Jarod
1 year ago
Hmm, this is a tricky one. I was leaning towards D, but now I'm not so sure. I need to review the SFAS No. 131 guidelines again.
LA
Lavera
1 year ago
I'm not sure, but I think it makes sense to include both factors for a more comprehensive view.
NI
Niesha
2 years ago
I agree with Latia, because both assets and liabilities are important factors to consider.
AN
Annamaria
2 years ago
I think the correct answer is C. Both the segment's assets and liabilities need to be more than 10% of the combined assets and liabilities, respectively, for it to be reported under SFAS No. 131.
MI
Michael
1 year ago
That's correct. Both criteria must be met for the segment to be reported in the financial statements.
FL
Floyd
1 year ago
C) Both I and II.
ST
Stephen
1 year ago
So, if only one of the factors meets the 10% threshold, the segment wouldn't be reported?
VE
Veronique
1 year ago
C) Both I and II.
LA
Lashawnda
1 year ago
I agree, it makes sense that both factors need to be considered for reporting purposes.
EM
Emilio
1 year ago
I think the correct answer is C. Both the segment's assets and liabilities need to be more than 10% of the combined assets and liabilities, respectively, for it to be reported under SFAS No. 131.
LA
Latia
2 years ago
I think the answer is C) Both I and II.