22 • 1

CHAPTER

22

SEGMENTAL AND FOREIGN

OPERATIONS DISCLOSURES

Lee H. Radebaugh

Brigham Young University

Donna L. Street

University of Dayton

CONTENTS

22.1 Introduction 1
22.2 Evolution of Segmental Disclosure
Standards 2
(a) Demand for Information 2
(b) Influential Factors in the
United States 3
(c) Demand for Information by
Governments 5
22.3 Segmental Standards in the
United States 5
(a) General Objectives of SFAS
Statement No. 131 6
(b) Operating Segments 7
(c) Information Provided for
Reportable Operating Segments 8
(d) Information about Products
and Services and Geographic
Areas 9
(e) Information about Major
Customers 10
(f) Interim Information 10
(g) Illustration 10
22.4 Global Benchmark—IAS 14
Revised 13

(a) General Objectives of IAS

14R 14

(b) Primary Segments Under

IAS 14R 14

(c) Secondary Segments 15

(d) Information Required for

Primary and Secondary

Segments 16

(e) IAS 14R and FASB Statement

No.Compared 16

(f) Illustration 16

22.5 Other Segment Reporting

Standards 20

22.6 Cost/Benefit Considerations 20

(a) Benefits of Segmental

Disclosures 20

(b) Costs of Segmental

Disclosures 21

22.7 Voluntary Disclosures 21

22.8 The Future 25

SOURCES AND SUGGESTED

REFERENCES 26

22.1 INTRODUCTION. The 1950s and 1960s were characterized by a trend toward
significant diversification, both by line of business and geographic area. In more re-
cent years, diversification has continued for multinational corporations (MNC), par-
ticularly in regard to geographic activity. Accordingly, questions have surfaced as to
whether consolidated financial statements are adequate where the corporation’s op-