For segment reporting purposes, the components of a vertically integrated business
A) Cannot be reported separately.
B) Must be reported separately.
C) May or may not be reported separately depending on the circumstances.
D) None of the above.

Question

Quizplus · Accepted Answer

For segment reporting purposes, the components of a vertically integrated business may be reported separately if they meet certain criteria set forth by accounting standards such as IFRS 8 or ASC 280 under US GAAP. These criteria typically include considerations such as whether the components represent distinct business activities or geographical areas, whether the results are regularly reviewed by the entity's chief operating decision maker, and whether discrete financial information is available for the components. If the components do not meet the criteria for separate reporting, they may be aggregated with other parts of the business. Therefore, the decision to report segments separately depends on the specific circumstances of the business and its internal reporting structure.

For Segment Reporting Purposes, the Components of a Vertically Integrated