_____ Aggregation of two or more reportable operating segments (not two or more operating segments) having (1) similar economic characteristics and (2) a majority-not all-of other FAS 131 specified similarities is
A) Mandatory.
B) Prohibited.
C) Optional.
D) None of the above.

Question

Quizplus · Accepted Answer

Under FAS 131, which is the Financial Accounting Standards Board (FASB) standard on reporting about segments of an enterprise and related information, aggregation of two or more reportable operating segments is optional if they have similar economic characteristics and a majority, but not all, of the other similarities specified by the standard. This allows a company to present a clearer picture of its operations by combining segments that are alike in many ways, but not necessarily identical, into a single reportable segment. This can simplify financial reporting and make it easier for users of financial statements to understand the company's performance and prospects. However, the standard requires that certain criteria be met for segments to be aggregated in this way.

_____ Aggregation of Two or More Reportable Operating Segments (Not