Segment Reporting A Number Of Issues To Study

The modern security market is established on the information disclosure system, which is an important assurance to the development of economy in a healthy way. Nowadays, more and more enterprises diversify their operations in order to occupy markets and reduce risks. Therefore, the usefulness of the information based on the whole company is decreased. The advantage of consolidated financial statement is that it can fairly present the financial condition and operating results of an entity as a whole. However, it also ignores some important information of diversified operations. To make up the weakness, firms are required to present segment report usually.Since the 1960's, western countries began to do some researches on segment report. Heretofore, they have set up comparatively perfect segment report standard systems. In contrast, our researches on segment report distinctively lag behind. So it requires enacting a segment report standard objectively, in order to regulate segment information disclosure. Enacting segment report standards possess important realistic meanings in our country. This is the reason why the author chooses this subject as her thesis.The dissertation is composed of three chapters:Chapter 1: A brief account of segment report This chapter involves two points. The first one is to probe to the generation and development of segment report; the second one is to analyze the contradictions of supply and demand on disclosing segment information. Finally, the author indicates that it is necessary to enact a standard of segment report. Since London Stock Exchange required listed company to disclose segment information, the researches on the segment information disclosure have got obvious development in near several decades. In Western countries, comparatively perfect standards such as IAS14 (revised, 1997), and SFAS131are established.The segment report arose the furious dispute on both theory and practice. The bone of contention focuses on the segment information disclosure cost. The cost of supply and acquisition are incompatible. Information provider will abandon to disclose some certain information for lower disclosure cost, which bring account information in short supply. So, it is important to enact segment report standard.Chapter2: Theory framework of segment reportThe framework of segment report is made up of objective, quality feature and difficulty in accountancy. The main goal of segment report is to provide useful information that can help users make decision. The highest quality requirement of financial accounting information is decision usefulness. But reliability and relevance don't affect decision usefulness in the same direction. Under the situation of current capital market in our country, reliability should be the No.1 importance because there is so much false accounting information in listed company's report.There are still several controversial problems resulting from accounting transaction, such as the basis of organizing segment; the identification of reportable segment, the segment revenue and segment expenses. Chapter3: Enact segment report standards This chapter is the highlight in this thesis. Firstly, the author analyzes the current situation of the segment information in our country. Currently, the requirements on the disclosure of segment information in our country are still in the embryo. Secondly, the author chooses a few typical problems in 2002 annual financial report to study and analyze the shortage of current provisions and concludes that it is necessary to draft a standard of segment report. Finally, the author points out her own imagination of our segment report:1.The standard should be effective to the listed company.2.Provide information on the basis of "industry segment" and "geography segment"; consider internal organization and reporting systemat the same time. 3 According to the importance and cost-effective principle, Use revenue profit and assets as quantitative thresholds to identify reportable seg...