3.7 Presentation of Nonreportable Operating Segments
ASC 280-10
50-15 Information about other
business activities and operating segments that are not
reportable shall be combined and disclosed in an all other
category separate from other reconciling items in the
reconciliations required by paragraphs 280-10-50-30 through
50-31. The sources of the revenue included in the all other
category shall be described.
The “all other” category represents activities that either:
- Are not individually reportable and do not meet the criteria to be aggregated with another operating segment.
- Do not meet the criteria to be an operating segment.
For components that are not reportable segments (e.g., corporate
headquarters or certain functional departments, other business activities, or
operating segments), a public entity may not recognize revenues or may recognize
revenues that are only incidental to the entity’s activities for these components.
Such components should be included in the all other category if they do not qualify
as reportable segments. Public entities should exclude the “corporate” or “corporate
and all other” category, as applicable, from the total of the reportable segments
for segment revenue, segment performance measures, and segment assets in accordance
with ASC 280-10-50-15 and ASC 280-10-55-48.
Since the all other category could potentially include an operating segment that does
not meet the reportable segment criteria as well as other activities, ASC 280
requires a public entity to describe the sources of revenue that are included in the
all other category.
Example 3-10
Company A has three operating segments — X,
Y, and Z — and a corporate headquarters that does not
constitute an operating segment. Segments X and Y are
considered reportable segments and exceed the 75 percent
revenue test. Segment Z does not have similar economic
characteristics and does not meet the quantitative
thresholds to be considered a reportable segment. Company
A’s management does not believe that separate disclosures
about Z would be useful to financial statement users or
investors and does not consider Z to be a reportable
segment. Because X and Y meet the 75 percent revenue test, A
is not required to identify additional reportable segments.
Company A can include its corporate headquarters and Z in
the all other category and describe the sources of revenue
for this category.
Company A has consolidated GAAP revenue of
$8,200. Segments X and Y have revenue from external
customers of $3,000 and $5,000, respectively, and
intersegment revenue of $500 and $300, respectively.
Company A would present the segment revenue for the corporate
and all other category as follows:
Company A would need to provide similar disclosure for the
corporate and all other category for its segment performance
measure. Similar segment assets would only need to be
disclosed if those segment assets were provided to the
CODM.