Question: You are compiling the consolidated financial statements for Winsor Corporation International. The corporation’s accountant, Anthony Reese, has provided you with the following segment information.

Note 7: Major Segments of Business WCI conducts funeral service and cemetery operations in the United States and Canada. Substantially all revenues of WCI’s major segments of business are from unaffiliated customers. Segment information for fiscal 2018, 2017, and 2016 follows.

(thousands)
	Funeral	Flora	Cemetery	Real Estate	Dried Whey	Limousine	Consolidated
Revenues
2018	\(302,000	\)10,000	\( 73,000	\) 2,000	\(7,000	\)12,000	$406,000
2017	245,000	6,000	61,000	4,000	4,000	4,000	324,000
2016	208,000	3,000	42,000	3,000	1,000	3,000	260,000
Operating Income
2018	74,000	1,500	18,000	(36,000)	500	2,000	60,000
2017	64,000	200	12,000	(28,000)	200	400	48,800
2016	54,000	150	6,000	(21,000)	100	350	39,600
Capital Expenditures
2018	26,000	1,000	9,000	400	300	1,000	37,700
2017	28,000	2,000	60,000	1,500	100	700	92,300
2016	14,000	25	8,000	600	25	50	22,700
Depreciation and Amortization
2018	13,000	100	2,400	1,400	100	200	17,200
2017	10,000	50	1,400	700	50	100	12,300
2016	8,000	25	1,000	600	25	50	9,700
Identifiable Assets
2018	334,000	1,500	162,000	114,000	500	8,000	620,000
2017	322,000	1,000	144,000	52,000	1,000	6,000	526,000
2016	223,000	500	78,000	34,000	500	3,500	339,500

Instructions

Determine which of the above segments must be reported separately and which can be combined under the category “Other.” Then, write a one-page memo to the company’s accountant, Anthony Reese, explaining the following.

(a) What segments must be reported separately and what segments can be combined.

(b) What criteria you used to determine reportable segments.

(c) What major items for each must be disclosed

A parent company's financial explanations and those of all its auxiliaries or divisions make up a consolidated financial statement. The Financial Accounting Standards Board frequently alludes to an organization with many undertakings within a solidified financial statement.

To: Anthony Reese, Accountant

From: A Student

Date: Current date

Subject: Determination of reportable segments for Winsor Corp.

According to my analysis of the segment data you provided, the funeral, cemetery, and real estate sectors need to be reported separately. The latter three sections—limousine, floral, and dried whey—can be grouped under the heading "Other."

I used 2018 data and three criteria proposed by the IASB to draw this conclusion. Firstly, if a segment's revenue is greater than or equal to 10% of the company's total revenue, it must be reported separately. It is true for the funeral and cemetery categories, where total revenue exceeds $40,600, i.e., (10 percent of the combined revenue).

Second, a segment is considered critical and sufficient to be detailed independently if its outright operating profit or operating loss breaks even with 10% or more of the more prominent of the following absolute amounts: (a) the combined operating profit of all portions without an operating loss, or (b) the combined working loss of all sections that experienced a loss. All profitable portions together create an operational profit of $96, 000, i.e., (74,000+1,500+18,000+500+2,000). Whereas the operating loss for the real estate segment is more than 10% of total profit in absolute terms, both the funeral and cemetery segments have operating profits that outperform 10% of add-up to benefits. All three must, in this manner, be detailed separately.

Thirdly, if a segment's identifiable assets are higher than or rise to 10% of the entire identifiable assets for all segments, that segment must be detailed independently. Once more, the cemetery, real estate, and burial service services categories all pass this test since they have identifiable assets that are more than 62,000,i.e., (10 percent of 620,000). None of the previously mentioned necessities are met by the dried whey, flora, or limousine portions, so they are not detailed independently.

Revenues, operating profit (loss), identified assets, depreciation expense, and the number of capital expenditures must all be included when reporting segment statistics. Furthermore, the company must use the consolidated entity's accounting foundation to compile all segment information.