trated in Exhibit 22.3. In the matrix, Kellogg provides data on three products within
the U.S. geographic region and two products within the International geographic re-
gion. Matrix reporting will be further discussed later in this chapter. Kellogg also dis-
closes that its largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for
approximately 11% of consolidated sales during 2001, comprised principally of sales
within the United States.
Wal-Mart’s 2001 segment reporting illustrates the concept of mixed operating seg-
ments. The company states that operating segments are identified “based on man-
agement responsibility within the United States and geographically for all interna-
tional units.” Wal-Mart’s three operating segments include two product lines
(Wal-Mart Stores and SAM’s CLUB) and a geographic region (International). For
each operating segment, the company discloses revenues from external customers,
intercompany real estate income, depreciation and amortization, operating income,
and assets. Supplemental enterprise-wide level data is provided for the two geo-
graphic regions (United States and Other); disclosures include long-lived assets ex-
cluding goodwill and additions to long-lived assets. Supplemental enterprise-wide
level data is also provided for the ASDA subsidiary (within the International seg-
ment); disclosures include sales and long-lived assets.
22.4 GLOBAL BENCHMARK: IAS 14 REVISED. The International Accounting Stan-
dards Committee (IASC) was founded in 1973 with the objective of harmonizing ac-
counting standards worldwide. During the late 1990s in the interest of international
harmonization, the IASC worked closely with the FASB and AcSB in developing In-
ternational Accounting Standard 14 Revised (IAS 14R). Accordingly, the current
North American and International segmental reporting standards are similar in many
respects. Before discussing IAS 14R, we will consider its predecessor.
The original version of IAS 14 was issued in 1981 and required that firms disclose
sales, profits, and identifiable assets for each significant geographic and line-of-busi-
ness segment.^13 Unfortunately, IAS 14 allowed companies to exercise considerable
judgment in determining what was significant. The standard was also criticized for
22.4 GLOBAL BENCHMARK: IAS 14 REVISED 22 • 13Enterprise Wide Data (Millions of Dollars)
Product information for 2001 from external customers
United States
Retail channel cereal $2481.9
Snacks 2263.5
Other 1383.6
International
Cereal 2432.2
Convenience foods 292.1
Consolidated 8853.3Exhibit 22.3 Illustration of the Matrix Format of Segmental Reporting as Provided by
Kellogg.
(^13) IASC, 1981.