1.4 Interactions With Other Published Information
The segment determinations reached by a public entity that files with the SEC
form the framework for certain other disclosures within the periodic filing,
including the business and MD&A sections. Management should be able to explain
why the entity’s segment reporting is appropriate if other published sources of
information about how the entity is being managed (e.g., its Web site, press
releases, investor presentations, and other parts of its periodic report) are
different from the segment reporting.
The interaction of segment reporting in the financial statements with information provided in other parts
of the entity’s periodic report is discussed further in Chapter 6.
Example 1-1
Company A has disclosed in its 20X6 Form 10-K filing that it has a single operating segment. However, A’s Web
site discusses A’s three main product lines, and a review of the executive leadership Web page indicates that
A has a senior vice president in charge of each product line. In addition, A’s most recent investor presentation
provides profitability information for each product line.
Company A’s executive leadership Web page and disclosure of profitability information by product line may
suggest that the management approach is based on product line and that a single operating segment may
not properly reflect that management approach. Company A would be expected to be able to reconcile this
contradictory evidence to its determination and reporting of a single operating segment.