Presented below is an excerpt from the financial statements of H. J. Heinz Company.

Segment and Geographic Data The company is engaged principally in one line of business—processed food products—which represents over 90% of consolidated sales. Information about the business of the company by geographic area is presented in the table below There were no material amounts of sales or transfers between geographic areas or between affiliates, and no material amounts of United States export sales.
Foreign
(In thousands of U.S. dollars)	Domestic	United Kingdom	Canada	Western Europe	Other	Total	Worldwide
Sales	\(2,381,054	\)547,527	\(216,726	\)383,784	\(209,354	\)1,357,391	$3,738,445
Operating income	246,780	61,282	34,146	29,146	25,111	146,685	396,465
Identifiable assets	1362,152	265,218	112,620	294,732	143,971	816,541	2,178,693
Capital expenditures	72,712	12,262	13,790	8,253	4,368	38,673	111,385
Depreciation expense	42,279	8,364	3,592	6,355	3,606	21,917	64,196

Instructions

(a) Why does H. J. Heinz not prepare segment information on its products or services?

Step by step solution

01

Meaning of Segment reporting

Segment reporting is a method of representing financial statement items by segment. Section-by-section findings are displayed later. Annual financial statements, augmented with segment data from segment reporting, give a more detailed picture of a company's financial position, asset position, and profit position.

02

Explaining the reason for not preparing segment information

Since H.J. Some companies like Heinz only have one core product or service, it's hard to make fragmented data available in a meaningful way. The principal indicates that a certain segment controls 90% of the company's sales, profits, and identifiable assets. Although segmented figures are not given in this example, the industry-leading segment should be recognized.

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