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They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words?
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They said that segment revenue segment expensegment assets and liabili...
Understanding Segment Reporting in Financial Statements
Financial statements for enterprises often include different segments to provide a clearer picture of financial performance. Here’s a breakdown of the key concepts involved:
Segment Revenue, Expenses, Assets, and Liabilities
- Segment revenue is the income generated from specific segments of the business.
- Segment expenses are the costs incurred by those segments.
- Segment assets represent the resources owned by each segment.
- Segment liabilities are the obligations related to those segments.
Intra-Enterprise Balances and Transactions
- Intra-enterprise balances refer to amounts owed between different segments within the same enterprise.
- Enterprise transactions are activities that occur within the company, such as sales or transfers between segments.
Elimination Process in Financial Statements
- When preparing consolidated financial statements, it is essential to eliminate intra-enterprise transactions to avoid double counting.
- However, the paragraph mentions that segment figures are determined before these eliminations occur, meaning the initial calculations include all transactions, even those between segments.
Implication of Single Segment Transactions
- The statement asserts that for transactions that occur within a single segment, the elimination process does not significantly affect the segment's reported figures.
- This means that if the transactions are confined to one segment, they are included in the segment’s revenue, expenses, assets, and liabilities without needing adjustment.
Conclusion
In summary, segment reporting allows an enterprise to analyze financial data at a more granular level. The elimination of intra-enterprise transactions helps ensure the accuracy of consolidated financial statements while still reflecting the performance of individual segments.
Financial statements for enterprises often include different segments to provide a clearer picture of financial performance. Here’s a breakdown of the key concepts involved:
Segment Revenue, Expenses, Assets, and Liabilities
- Segment revenue is the income generated from specific segments of the business.
- Segment expenses are the costs incurred by those segments.
- Segment assets represent the resources owned by each segment.
- Segment liabilities are the obligations related to those segments.
Intra-Enterprise Balances and Transactions
- Intra-enterprise balances refer to amounts owed between different segments within the same enterprise.
- Enterprise transactions are activities that occur within the company, such as sales or transfers between segments.
Elimination Process in Financial Statements
- When preparing consolidated financial statements, it is essential to eliminate intra-enterprise transactions to avoid double counting.
- However, the paragraph mentions that segment figures are determined before these eliminations occur, meaning the initial calculations include all transactions, even those between segments.
Implication of Single Segment Transactions
- The statement asserts that for transactions that occur within a single segment, the elimination process does not significantly affect the segment's reported figures.
- This means that if the transactions are confined to one segment, they are included in the segment’s revenue, expenses, assets, and liabilities without needing adjustment.
Conclusion
In summary, segment reporting allows an enterprise to analyze financial data at a more granular level. The elimination of intra-enterprise transactions helps ensure the accuracy of consolidated financial statements while still reflecting the performance of individual segments.
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They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words?
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They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words?.
They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for They said that segment revenue segment expensegment assets and liabilities are determined before intra enterprise balances and enterprise transactions are eliminated as part of the process of preparation of enterprise financial statements accepted to the extent that such intra enterprise barances at transactions are within single segment I don't understand above paragraph saying in simple words?.
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