ASC 280,Disclosure About Segments of an Enterprise and Related Information,has

question 20

Essay

ASC 280,Disclosure about Segments of an Enterprise and Related Information,has taken what has been referred to as a "management approach" to the definition of a segment and the allocation of costs to a segment.
Required:
a)What is meant by a management approach? How does this concept of a management approach impact the decision to disclose information?
b)How are decisions about cost allocation handled in segment disclosures?

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Definitions:

Fair Value

Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Ordinary Repairs

Regular maintenance or repairs to keep property and equipment functioning efficiently without extending its life or increasing its value substantially.

Rental Property

Real estate property that is leased or rented out to tenants, generating income for the owner.

Journal Entry

This term refers to the method used in bookkeeping to log transactions where each entry must have a corresponding and opposite entry within the financial records.