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.

Corporate headquarters or certain functional departments may not recognize revenues or may recognize revenues that are only incidental to the activities of the public entity. Those components should be included in the all other category. Public entities should present the all other category alongside the reportable segments in the tabular presentation (i.e., the activities that comprise the all other category should not be presented as reconciling items to consolidated totals). Since the all other category could potentially include many immaterial operating segments and 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. Therefore, A can include its corporate headquarters and Z in the all other category and describe the sources of revenue for this category.

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