In addition to the disclosures discussed in Chapter 4 about each reportable segment, ASC 280 requires disclosure about products and services and geographical operations on an entity-wide basis regardless of how the entity is organized.
Entity-wide disclosures should not be based on the financial information used under the management approach for identifying reportable segments. Rather, the basis used for the entity-wide disclosures would be the same as that used to produce the U.S. GAAP financial statements and not the segment footnote (unless each basis happened to be the same). The result is that the entity-wide disclosures would align with the corresponding amounts in the U.S. GAAP financial statements.
An entity may combine entity-wide disclosures with those required by other pronouncements if doing so would benefit financial statement users. For instance, combining disclosure of risks and uncertainties required by ASC 275 related to concentrations of customers, products or services, or geographic area with entity-wide disclosures in ASC 280 could result in a seamless presentation of these amounts and the inherent risks associated with them.
50-40 A public entity shall report the revenues from external customers for each product and service or each group of similar products and services unless it is impracticable to do so. The amounts of revenues reported shall be based on the financial information used to produce the public entity’s general-purpose financial statements. If providing the information is impracticable, that fact shall be disclosed.
50-41 A public entity shall report the following geographic information unless it is impracticable to do so (see Example 3, Case D [paragraph 280-10-55-51]):
Revenues from external customers attributed to the public entity’s country of domicile and attributed to all foreign countries in total from which the public entity derives revenues. If revenues from external customers attributed to an individual foreign country are material, those revenues shall be disclosed separately. A public entity shall disclose the basis for attributing revenues from external customers to individual countries.
Long-lived assets other than financial instruments, long-term customer relationships of a financial institution, mortgage and other servicing rights, deferred policy acquisition costs, and deferred tax assets located in the public entity’s country of domicile and located in all foreign countries in total in which the public entity holds assets. If assets in an individual foreign country are material, those assets shall be disclosed separately.
The amounts reported shall be based on the financial information that is used to produce the general-purpose financial statements. If providing the geographic information is impracticable, that fact shall be disclosed. A public entity may wish to provide, in addition to the information required by the preceding paragraph, subtotals of geographic information about groups of countries.
55-24 The geographic information specified by paragraph 280-10-50-41 is required, if material, by country. That paragraph also states, however, that a public entity may always provide, in addition to the information required by this paragraph, subtotals of geographic information about groups of countries, for example, the European Monetary Union.
The entity-wide disclosure requirements in ASC 280-10-50-40 for products and services, and those in ASC 280-10-50-41 for geographic information, include an impracticability exception. If, after careful consideration, an entity determines that providing the disclosures would be impracticable, an entity should disclose that fact. However, while the SEC staff has accepted registrants’ assertions of impracticability, use of the exception is expected to be unusual and infrequent. Accordingly, an entity should have a reasonable basis for asserting that the disclosures are impracticable and should periodically reassess this assertion.
50-42 A public entity shall provide information about the extent of its reliance on its major customers. If revenues from transactions with a single external customer amount to 10 percent or more of a public entity’s revenues, the public entity shall disclose that fact, the total amount of revenues from each such customer, and the identity of the segment or segments reporting the revenues. The public entity need not disclose the identity of a major customer or the amount of revenues that each segment reports from that customer. For purposes of this Subtopic, a group of entities known to a reporting public entity to be under common control shall be considered as a single customer, and the federal government, a state government, a local government (for example, a county or municipality), or a foreign government each shall be considered as a single customer (see Example 3, Case E [paragraph 280-10-55-52]).