...Scrutinizing segment reporting is not new. FASB 14, the statement that FASB 131 replaced, required that segments be reported on a geographic and industry basis, unfortunately FASB 14 was too vague and companies were able to get around it. Analysts complained that it allowed too many companies to consider themselves single-segment firms. A study by the Financial Accounting Standards Board of almost 7,000 public companies found that some 75 percent said they operated in only one industry segment during the 1985—1991 time frame [ (Reason, 2001) ]. Because many companies were not providing expected segment information, the FASB replaced FASB 14 with FASB131. Under FASB 131, segments are defined from a management perspective--how management organizes segments within the enterprise for making decisions and assessing performance [ (Albrecht & Chipalkatti, 1998) ]. Under FASB 131, the management approach to segment reporting requires that segment information must be consistent with a firm’s management or organizational approach. FASB 131 was established to help the SEC see how companies are managed through the eyes of the company management. This means that companies had to start reporting the same information that they use internally for evaluating segment performance and that is used in deciding how to allocate resources to segments [ (Alfonso, Hollie, & Yu, 2010) ]. FASB 131 establishes standards for the way that public business enterprises report information...
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...Entity: PepsiCo, Inc. Source: Form 10-K filed with SEC for fiscal year ended December 27, 2014 (via SEC Edgar) PepsiCo has six (6) (divisions) segments, which they report on all of them. Frito-Lay North America (FLNA): makes, markets, distributes and sells branded snack foods. These foods include Lay’s potato chips, Doritos tortilla chips, Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips, Ruffles potato chips, Fritos corn chips and Santitas tortilla chips. FLNA’s branded products are sold to independent distributors and retailers. In addition, FLNA’s joint venture with Strauss Group makes, markets, distributes and sells Sabra refrigerated dips and spreads. Quaker Foods North America (QFNA): makes, markets, distributes and sells cereals, rice, pasta, dairy and other branded products. QFNA’s products include Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Quaker grits, Cap’n Crunch cereal, Life cereal, Rice-A-Roni side dishes, Quaker rice cakes, Quaker oat squares and Quaker natural granola. These branded products are sold to independent distributors and retailers. Latin America Foods (LAF): markets, distributes and sells a number of snack food brands including Doritos, Cheetos, Marias Gamesa, Ruffles, Emperador, Saladitas, Lay’s, Rosquinhas Mabel, Elma Chips and Sabritas, as well as many Quaker-branded cereals and snacks. These branded products are sold to independent distributors and retailers. PepsiCo Americas...
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...SFAS No. 131 (ASC 280) allows companies to report segment information by line of business, geographic location, or a combination of the two. Which of these does Pepsi do? What does Coca-Cola do? Pepsi reports segment information by a combination of line of business and geographic location, and so does Coca-Cola. The company has identified six reportable segments, which are Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), Europe, and Asia, Middle East & Africa (AMEA). Its best-known competitor, Coca-Cola, identified seven reportable segments: Eurasia and Africa; Europe; Latin America; North America; Pacific; Bottling Investments; and Corporate. Why does FASB require companies to disclose information by geographic area? In other words, how is geographic information valuable for financial statement users? For what geographic areas must a company provide disclosure? What geographic disclosures does Pepsi provide? What can you learn about PepsiCo from studying this information? The FASB requires companies to disclose information by geographic areas because financial information about the operations of the company’s divisions in different geographic areas assists stakeholders in understanding concentrations of risks and prospects for growth due to changes in economic conditions. Disclosure by geographic area assists stakeholders in understanding concentrations of risk due to all type of changes specific...
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...Case 1 Issue 1: Identify the Operating Segments for SPI According to ASC 280-10-50-1 an operating segment is a component of a public entity that has all of the following characteristics: • It engages in business activities from which it may recognize revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). • Its operating results are regularly reviewed by the public entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. • Its discrete financial information is available. According to these rules SPI has 7 operating segments, they include the following: shampoo, cosmetics, diapers, paper towels, Jazzy Juice, Blasto Energy Drinks, and fruit and granola snacks. Issue 2: Determination of Reportable Segments — Based on the information provided, identify the facts that are useful and develop initial thoughts as to which of SPI’s operating segments can be aggregated. Provide support for your initial thoughts regarding aggregation of operating segments and identify additional information that may be needed in order to reach a conclusion. According to ASC 280-10-50-(11-13) Two or more operating segments may be aggregated into a single operating segment if they are similar in the following areas: • The nature of the products and services • The nature of the production processes • The type or class of customer for their...
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...DEVELOP A MEASUREMENT FRAMEWORK THAT DELIVERS BUSINESS INTELLIGENCE A SIMPLE STEP BY STEP GUIDE TO BUILDING REPORTS THAT ACTUALLY ALLOW BUSINESSES TO MAKE ACTIONABLE INSIGHTS PAGE 1 INTRODUCTION HOW OFTEN HAVE YOU LOOKED FOR REPORTING AND ANALYTICS TO GET BUSINESS INTELLIGENCE AND HAVE END UP WITH MOUNDS OF DATA ON EXCEL SPREADSHEETS? MORE OFTEN THAN NOT, YOU FIND YOURSELF WITH AN ENDLESS SUPPLY OF REPORTS BUT ARE STILL UNABLE TO GET ANSWERS TO YOUR MOST CRITICAL BUSINESS QUESTIONS? DON’T WORRY – YOU’RE NOT ALONE. Many companies are faced with the same exact issues that you are. It’s very likely these companies have one or more of the following foundational problems: ›› They don’t tie business results back to business objectives or measure against a set of key goals THE 6 STEPS FOR BETTER REPORTING Instead of diving right in and building another report, I’m going to recommend that you take a step back to outline a measurement framework using the following steps: ›› They lack a cohesive strategy to measure 01 IDENTIFY BUSINESS OBJECTIVES ›› They tend to build reports from the 02 DETERMINE KPIs 03 DEFINE KPI GOALS 04 IDENTIFY SUPPORTING METRICS 05 DETERMINE REPORTING DIMENSIONALITY 06 ORGANIZE INTO A FRAMEWORK their efforts across the entire business ground up and overload their end-users with pages of data and metrics with few next steps or optimization suggestions DO YOU NOTICE A...
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...I will be happy to assist you, based on the information it is clear that the company does indeed have different operating segments. This was determined from ASC 280-10-50-1; within the codification there are three characteristics that the company must have. For clarity I have posted them below. 1. a. It engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). 2. b. Its operating results are regularly reviewed by the public entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. 3. c. Its discrete financial information is available For SEC reporting purposes we find guidance from ASC 280-10-50-11 regarding aggregation criteria as well as 280-10-50-12 which sets forth the qualitative thresholds. The nature of the entire business in which the company operates in is very similar from the type of customer they serve to the service they deliver everything is very standardized. So after careful analysis I have determined that the aggregation criterion is met. The threshold requirements have been met by certain operations in the company; upon analysis of the information provided it was determined that Big Islands Georgia, Big Islands North Carolina, Big Islands Washington, Still Water Thrills Orlando, Island Adventure Cove, and Still Water Thrills Charlotte all exceed...
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... $210,000 Printing $44,000 $25,000 $13,000 $82,000 Mailing $11,000 $8,000 $5,000 $24,000 Cont. Ed. Instructor’s fees $60,000 $60,000 Storage rental $20,000 $20,000 Segment margin: $50,000 $105,000 ($30,000) $102,000 ($120,000) $134,000 Not Traceable expenses: Occupancy $30,000 $10,000 $10,000 $20,000 $30,000 $100,000 General & Admin....
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...Case Report-1: The Fashion Channel 1) What is expected outcome of each of the targeting scenarios? (complete both the Ad Revenue and Financial calculators to fully understand the financial impact of the scenarios) Ad Revenue Calculator | | | | | | | Current | 2007 Base | Scenario 1 | Scenario 2 | Scenario 3 | TV HH | 110.000.000 | 110.000.000 | 110.000.000 | 110.000.000 | 110.000.000 | Average Rating | 1,0% | 1,0% | 1,2% | 0,8% | 1,2% | Average Viewers (Thousand) | 1100 | 1100 | 1320 | 880 | 1320 | Average CPM* | $2,00 | $2,00 | $1,80 | $3,50 | $2,50 | Average Revenue/Ad Minute** | $2.200 | $2.200 | $2.376 | $3.080 | $3.300 | Ad Minutes/Week | 2016 | 2016 | 2016 | 2016 | 2016 | Weeks/Year | 52 | 52 | 52 | 52 | 52 | Ad Revenue/Year | $230.630.400 | $230.630.400 | $249.080.832 | $322.882.560 | $345.945.600 | Incremental Programming Expense | | $ - | $ - | $ 15.000.000 | $ 20.000.000 | | 2006 Actual | 2007 Base | Scenario 1 | Scenario 2 | Scenario 3 | Exhibit 5: Financials | | | | | | Revenue | | | | | | Ad Sales | $230.630.400 | $230.630.400 | $249.080.832 | $322.882.560 | $345.945.600 | Affiliate Fees | $80.000.000 | $81.600.000 | $81.600.000 | $81.600.000 | $81.600.000 | Total Revenue | $310.630.400 | $312.230.400 | $330.680.832 | $404.482.560 | $427.545.600 | | | | | | | Expenses | | | | | | Cost of Operations | $70.000.000...
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...equipment and many more miscellaneous items are listed, bought or even sold on a daily basis. In other word, eBay generally target online auction and shopping communities. However, eBay also has business strategies to target specific segment of the market. From the entire wide range of items available, eBay originally was set up to promote and sell antique and collectibles. This causes eBay to focus more on this segment market. Another key market segment for eBay would be the car and motor enthusiast. This is because of the unexpected popularity with the users, which is the second most visited segment on the site. Due to this, eBay has been focusing more on these two segments as their primary market target. KEY SEGEMENTS Antiques & Collectibles Started out to be selling collectibles and antiques with auction-based online sales. These targeted markets are usually antique lovers that are willing to bid very high for a rare item. EBay has established them very well in the market, which until today, antiques, and collectibles generates the highest sales gross. Motor lovers Using credibility of leading car collector Kruse Inc., eBay expanded its categorical offerings with eBay Motors. EBay Motors became one of its most successful target segments with $2,500M Global Gross Merchandise Sales in 2002. FOCUS STRATEGY It is important for every service to have focus strategy as it can help to identify and promote itself, which would set apart with it’s competition. As presented...
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...caters to the three major segments of the power tools business namely, Industrial, Tradesmen, and Consumer. D&B’s market share is almost the same as Milwaukee and Makita in the Industrial and Consumer segment but with regards to the Tradesmen segment, B&D is behind. Despite its major presence in the industry, it faces a problem in the Tradesmen segment which only holds about a 9% share. This problem has been caused by a bad perception of the tradespeople regarding B&D due to its expansion into the Consumer segment shown by its successful Dustbuster® hand-held vacuum. D&B’s expansion to the Consumer segment has proved to be successful but it has also affected D&B’s image with the tradesmen who worked on residential construction. One tradesman stated, “. . . Black & Decker makes a good popcorn popper, and my wife just loves her Dustbuster, but I’m out here trying to make a living. . .” Tradesmen such as, electricians, plumbers, framers, roofers and etc are workers who are expected to show up to work with their own tools and this segment usually purchase their tools from home centers; and they regularly purchase tools for replacement basing their choices on conversations between co-workers at the job site. The fact that the households of these tradesmen use D&B as house appliances makes them think that D&B products won’t hold up in the work place making them choose other brands that focused more on the tradesmen segment. D&B looked for...
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...does the product aid in consumers doing?). In distinguishing the difference between the two Nike’s segments (sports and casual users), it is glaringly clear that each of the segments would have it completely the opposite ways. To the athletes, a shoe is a tool for them in achieving their goal and winning competitions. The athletes would be looking at the benefits that certain shoes would give them and have an edge over the other shoes. Better stability, better protection, better cushioning, etc. In turns these shoes would give them added value because with better stability would give better performance (more speed, etc), better protection would give them the assurance and avoidance of injury, better cushioning might give them the comfort that enables them to go the extra miles in achieving their goals. However, to the casual users, these attributes, benefits and values might have completely different meanings. The attributes are likely to emulate their heroes or even just following some trends. The benefits are it gives them status, recognition and to fit in. The value that these shies give them is no more than self-esteem. 1b. 1c. Marketers should carefully analyze the customer-product relationship in each target segment and develop marketing and promotion strategies accordingly that is appealing and appropriate to each one of them. Since the two segments are likely to be two very different types of personalities (athletes are generally a very different...
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...An operating segment is defined as a component of a business that engages in business activities, earns revenues, and incurs expenses. Other characteristics of operating segments include results being regularly reviewed by the entity’s decision maker, which the title may vary from entity to entity. This is done to allocate resources and assess performance. Financial information must also be available to the public for review. After reviewing the case, Sell-It Products Inc. has a total of seven operating segments that are in accordance with the information listed about operating segments. The seven segments include Shampoo, Cosmetics, Diapers, Paper Towels, Jazzy Juice, Blasto Energy Drink, and Fruit & Granola Snack. According to ASC 280-10, a reportable segment is an operating segment or an aggregation of two or more segments that exceeds certain quantitative thresholds. In regards to Sell-It Products Inc., there are four reportable segments which include Cosmetics, Paper Towels, Blasto Energy Drink, and Jazzy Juice Juice and Fruit & Granola Snack. The threshold test that was performed was the revenue test which means that the segments revenue must be at least 10 percent of combined revenue of all segments. Although Jazzy Juice and Fruit & Granola Snack did not pass the revenue test, I made an exception for them because they have similar characteristics when compared to each other. I categorized them as aggregated. Together, they meet the threshold for the revenue and are now...
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...raise the debt-to-capital ratio to 55% to 60%. If they leave the problem unaddressed, they might risk bankruptcy in the future. Analysis: Both of Champion and Cameron Iron Works were in related industries, automotive and petroleum equipment, which were profitable businesses. Cooper Industries was already doing those two businesses. For the opportunities identified in the case have to do with the purchase of Champion and Cameron Iron Works, both of them have a strategic fit with Cooper Industries’ long-term plans. For example, Champion has a poor management, old technology, and failures at diversification. But Cooper Industries is good at this field. Cameron Iron Works had a biggest Compression and Energy Business Segment until 1981. But it was the smallest segment of Cooper Industries. Moreover, Cameron Iron Works is a strong competitor of Cooper Industries. By buying its Cameron Iron Works, Cooper Industries would only have major competitor. Also, it would help Cooper Industries to manage its Five Forces, such as avoids high entry barriers and eliminates a competitor. Recommendation: In my point of view, Cooper Industries should buy both Champion and Cameron Iron Works. First of all, Cooper...
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...because it directly relates to those who will buy the data plans and ultimately use the product. It’s important to identify these segments and do their own marketing to help promote the use of the services to increase revenues. If they don’t get end user to use it telecom companies will drop them as the value to both the consumer and the telecom will not be profitable. 2. Sara : Married 42 has kids works part time, not tech savey, needs the technology to be easy to use. Her key features tend to put her into segment 1 Steve: 27 single late adopter of technology convenience is important to him thus most likely fits into segment 4 as he doesn’t have the newest technology and his adoption is slower. Regina most likely fits into segment 3 as value for the computer is quite high and she disagrees highly with q1, she also would search for the best price when looking to buy as she is younger and does not necessarily have the disposable income to upgrade. The advantage to doing both the qualitative and quantitative data is they both may show different types of customers you may not have originally thought of. Qualitative data really shows you who a person is and what they do however quantitative data substantiates the qualitative or turns it on its head because it is what the consumer perceives. Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 yes they seem very interested and have higher responses to wanting to use the service no They have a very low...
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...The cafe serves meals, drinks, salads, desserts, snacks and sandwiches. The students are paying for the meals through students cards via an electronic payment process within the campus area. During the summit time, the waiting time creates difficulties for the students. The cafe is facing trouble of waiting time and students have already started looking for an alternative of the cafe. Mah is one of the students who is searching a way to solve the issue in order to suggest to the management of the campus so that they have noticed this issue. These service supervisors come under the oversight of manager that serves all the home services segments. The services segment has its own two levels that include the home advisers along with assistant home supervisor. However, ARM and RA who is the full-time supervisor met to talk about the issues with the home. Nottingham Hall and Cambridge Hall are sharing a number of services so that is resulted in a single supervisor that is supervising both of the residencies. RA’s and ARM are met bi-weekly to talk about the issues of Nottingham Hall residencies and Cambridge Hall. The cafeteria was designed in the manner that it has three waiting lines such as L1, L2, and L3. Line 1 is devoted to precook meals and there is the record of serving food things. Line 2 is dedicated for the interactional cooking station where students are select the key ingredients for their meals. However, line 3 is dedicated for payment of the meals. These...
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