A major value of segment information for users is that
A) it focuses on issues other than cash flows.
B) in the United States, GAAP requires firms to disclose segment information by major country.
C) it provides information to investors that might involve cost of preparation but not cost of competitive advantage.
D) it allows users who have different information needs to get disaggregated information that might be of use to them.

Question

Quizplus · Accepted Answer

Segment information provides disaggregated information that might be of use to users with different information needs. For example, investors might be interested in revenue and profit by region, while managers might be interested in performance by product line. Segment information allows users to get the information relevant to their interests and make better decisions. Option A is incorrect because cash flows can also be reported by segment. Option B is incorrect because while GAAP requires segment information, it does not necessarily require it to be disclosed by major country. Option C is incorrect because the cost of preparation of segment information can also provide a competitive advantage.

A Major Value of Segment Information for Users Is That