Summary of Statement No. 131
Disclosures about Segments of an Enterprise and Related Information (Issued 6/97)
Summary
This Statement establishes standards for the way that public
business enterprises report information about operating segments in
annual financial statements and requires that those enterprises
report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes
standards for related disclosures about products and services,
geographic areas, and major customers. This Statement supersedes
FASB Statement No. 14, Financial Reporting for Segments of a
Business Enterprise, but retains the requirement to report
information about major customers. It amends FASB Statement No. 94,
Consolidation of All Majority-Owned Subsidiaries, to remove
the special disclosure requirements for previously unconsolidated
subsidiaries. This Statement does not apply to nonpublic business
enterprises or to not-for-profit organizations.
This Statement requires that a public business enterprise report
financial and descriptive information about its reportable
operating segments. Operating segments are components of an
enterprise about which separate financial information is available
that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance.
Generally, financial information is required to be reported on the
basis that it is used internally for evaluating segment performance
and deciding how to allocate resources to segments.
This Statement requires that a public business enterprise report a
measure of segment profit or loss, certain specific revenue and
expense items, and segment assets. It requires reconciliations of
total segment revenues, total segment profit or loss, total segment
assets, and other amounts disclosed for segments to corresponding
amounts in the enterprise's general-purpose financial statements.
It requires that all public business enterprises report information
about the revenues derived from the enterprise's products or
services (or groups of similar products and services), about the
countries in which the enterprise earns revenues and holds assets,
and about major customers regardless of whether that information is
used in making operating decisions. However, this Statement does
not require an enterprise to report information that is not
prepared for internal use if reporting it would be
impracticable.
This Statement also requires that a public business enterprise
report descriptive information about the way that the operating
segments were determined, the products and services provided by the
operating segments, differences between the measurements used in
reporting segment information and those used in the enterprise's
general-purpose financial statements, and changes in the
measurement of segment amounts from period to period.
This Statement is effective for financial statements for periods
beginning after December 15, 1997. In the initial year of
application, comparative information for earlier years is to be
restated. This Statement need not be applied to interim financial
statements in the initial year of its application, but comparative
information for interim periods in the initial year of application
is to be reported in financial statements for interim periods in
the second year of application.