The Definition of an Operating Segment Essay Example | Topics and Well Written Essays - 750 words

The Definition of an Operating Segment - Essay ExampleCorporations that sell at the retail level, but who similarly strike an online operation have multiple operating segments. The e-commerce operation would be considered an operating segment. Lets take the Jiffy Lube business as an example. The money generated by the oil colour change operation would be considered an operating segment. The car wash operation of the business is another operating segment. Any food items sold inside the instal in the waiting area would be a third operating segment of the company.2.I agree with your definition of an operating segment. It is imperative for the CEO or COO of a company to evaluate the fulfillance of each operating segment on a recurrent basis. Whenever an operating segment starts to under perform that segment could become unprofitable. A strategy that potful be used by management to eliminate operating segments that are not generating profits is divesture. Divesture can be defined as the partial or full disposal of an investment or asset through sale, exchange, closure or bankruptcy (Investopedia, 2011).Investopedia.com (2011). Divesture. Retrieved kinsfolk 7, 2011 from http//www.investopedia.com/terms/d/divestiture.aspaxzz1XEq4B6YF Effective and successful managers are able to generate profits from all the operating segments of a company. On many instances companies achieve amplification by adding operating segments to their operations. ... Two powerful stock exchanges are the NYSE and the LSE. The Securities and Exchange fiddle of 1933 requires companies to register with the SEC prior to going public. The Securities and Exchange Act of 1934 discusses the matter of being public. Once a company is public the SEC oversees its activities. The Securities and Exchange Act of 1934 regulates broker dealers and stock exchanges. 6. GAAP guidelines are used in the preparation of financial statement disclosures. Financial statement disclosures are comments or explanat ions listed in a companys financial statements. Three types of items that are cover by disclosures and whose inclusion is mandatory based on GAAP rules are changes or errors, asset retirement and insurance contract modification. There are also voluntary disclosures included in the business reports of companies. Some voluntary disclosures include forward looking statements and management analysis. 5. The threshold to for an operating segment to be reportable is listed below Reported revenue is at least 10 part of combined revenue Reported profit (loss) is at least 10 percent of combined profit (loss) Assets are 10 percent or more of combined assets (Schroeder & Clark & Cathey, 2011). Schroeder, R.G., Clark, M.W., Cathey, J.M. (2011). Financial Accounting Theory and Analysis (10th ed.). New Jersey fast one Wiley & Sons. 7. Weekly Summary Week 5 was very challenging, but I learned a lot about explanation during the week. The individual paper discussed gift funds. I learned that the use of pension funds became used a lot in corporate America after World War II. The accounting profession and the government have ensured that corporations respect the rights of retirees by properly funding pension funds. In