Reportable is not a synonym for operating. First identify operating segments. Then evaluate whether aggregation is permitted. Apply the revenue, profit or loss, and asset tests with controlled definitions and signs. Test external- revenue coverage, consider whether more information is needed, and preserve consistency and change disclosures.
The numerical work needs a reconciliation. Intersegment revenue and charges, unallocated corporate items, eliminations, different management measures, and consolidated GAAP amounts can all make segment totals differ from financial- statement captions.
A component that falls below one threshold is not automatically invisible. It may qualify under another test, be combined only if aggregation criteria are met, remain in an “all other” category, or require other information under the full model.
Apply the tests in order. ASC 280-10-50-12 provides the revenue, profit-or-loss, and asset thresholds. ASC 280-10-50-14 then requires enough separately reported segments to cover at least 75 percent of consolidated external revenue. The coverage test cannot rescue an omitted operating segment because it begins only after the operating-segment population has been identified.
Put the concept to work
Understand this concept
- Explain the order from operating-segment identification through permitted aggregation, quantitative tests, external-revenue coverage, consistency, and separate reporting.
Apply this concept
- Apply supplied Topic 280 aggregation and reportability criteria to controlled operating-segment data and reconcile reportable, other, elimination, and consolidated amounts without treating thresholds as the whole conclusion.
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- Operating segment — Analyze
To apply this concept: Required. The segment population and management evidence must be established before numerical tests are meaningful.
- Operating segment — Understand
To understand this concept: Required. Only identified operating segments enter the later aggregation and reportability analysis.
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Use this idea next
- Segment disclosure — Understand
Required level here: understand. Required. The disclosure starts with the identified reportable-segment structure.