FAF Review Team On FASB Statement 131 Segment Reporting —MarketWatch

Some Stakeholders Suggest Improvements to Segment Reporting Information 

A 1996 accounting standard established to improve the way public companies report financial information about their business segments generally achieves that purpose, although some stakeholders suggest improvements.

That was the overall conclusion of the post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (codified in Accounting Standards Codification Topic 280, Segment Reporting). The PIR process was established by the Financial Accounting Foundation (FAF) in 2010.   The Financial Accounting Foundation elaborates: 

 

Because Regulations Always Make Things Better

“With the completion of our second post-implementation review, we believe that PIR has become an established and valuable part of the standard-setting process,” said FAF President and Chief Executive Officer Teresa S. Polley. “We especially want to thank all of the stakeholders who contributed important feedback to the PIR team on the real-world application, usefulness and effectiveness of the business segments standard.” 

FASB Chairman Leslie F. Seidman said, “The post-implementation review report on Statement 131 affirms the overall effectiveness of the standard. However, the report identified aspects of Statement 131 that stakeholders think could be improved; for example, the effect of changes in technology on the determination of what information is reviewed by the chief operating decision maker. We are considering the reported findings and will provide our initial response in the coming weeks. We also will consider the IASB’s review of IFRS 8 before making a determination on how to proceed.” 

Statement 131 establishes standards for the way that public companies report information about operating segments in annual and interim financial statements. It also establishes standards for related disclosures about products and services, geographic areas, and major customers. The Statement does not apply to private companies or to not-for-profit organizations.

read the whole piece from the Financial Accounting Foundation  here. 

NACVA friend John C. Pappas writes:

On Monday, the Financial Accounting Foundation (FAF) completed its post-implementation review of Financial Accounting Standards Board (FASB) Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (codified in Accounting Standards Codification Topic 280, Segment Reporting).

Statement 131 is a 1997 accounting standard established to improve the way public companies report financial information about their business segments. The post-implementation review (PIR) team concluded that Statement 131 generally achieves that purpose, although some stakeholders suggest improvements.

We thought your members would be interested in the PIR team’s conclusions on Statement 131, which can be found within the press release, as well as in the final report. Perhaps you may be able to share both documents with your members?

Please be in touch if you have any questions, and if you can notify me if you do share the article or other documents with your members, that would be greatly appreciated. Thanks and have a great day.

see also:

• FAF Review Team Concludes FASB Statement 131 on Segment Reporting Generally Achieves Its Purpose – MarketWatch