This chapter focuses on two areas of significance to most large, publicly held enterprises: interim reporting and segmental disclosure. The relevance of financial information is enhanced if the information is provided on a timely basis. Interim financial reporting addresses the need for timely information and provides users with relevant data which may be used to evaluate the present and help to project future results. The division of an annual reporting period into shorter interim periods results in some unique accounting problems which are addressed in this chapter. Disclosure about segments of an enterprise is designed to provide relevant information about the various business activities in which an enterprise is involved. Such disclosures also provide information about the economic environments in which enterprises operate. Many enterprises consist of operating segments that differ significantly from each other in terms of products, economic environments, markets served, and manufacturing methods. The disclosure of segmental information follows a management approach which emphasizes how management organizes the segments of the enterprise for decision-making purposes and evaluation of performance. This approach will allow users of such information to better understand the activities and environments which affect an enterprise's performance, cash flows, and business risks. The disclosures called for by this approach for both annual and interim reporting purposes are discussed in this chapter.
Was this article helpful?