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In each episode of our What’s trending in SEC comments series, our guests bring you the latest themes in comment letters from the SEC’s Division of Corporation Finance for the most common topical areas of the financial statements.
This week we focus on segment reporting. Matt Sabatini and Reto Micheluzzi, PwC National Office partners, joined Heather Horn to break down some of the questions raised in these comments, giving you a deeper understanding of the SEC staff’s expectations, as well as context and insights into the GAAP requirements.
Topics include:
- 1:49 - A refresher on segment disclosures. Matt and Reto set the stage with an overview of the disclosure rules. Reto updates listeners on the current FASB project that may change the current segment disclosure requirements.
- 10:09 - What types of comments are companies getting? Matt and Reto discuss the main themes of recent comments. Common questions relate to how the company determined the Chief Operating Decision Maker, identified operating segments, and aggregated its operating segments to reportable segments, and the completeness of its entity-wide segment disclosures.
- 15:19 - Identifying reportable segments. Matt gives an overview of comments that issuers have received about identifying reportable segments. Issuers typically receive more questions when identifying only one reportable segment.
- 17:12 - Entity wide disclosures. There are a number of entity-wide disclosures that must be made even when the entity identifies only one reportable segment. Matt and Heather discuss some tips for getting these right.
- 20:19 - Aggregation of operating segments. Aggregating operating segments into a reportable segment is an area that requires significant judgment. Matt and Reto give some of the steps you can take to avoid common pitfalls.
- 31:32 - Key takeaways and reminders. We close with helpful advice to address segment issues heading into year end. Heather tries to stump Matt and Reto with some niche accounting questions.
Want to learn more?
Matt Sabatini is a partner in PwC's National Office.
Reto Micheluzzi is a partner in PwC’s National Office with over 25 years of experience solving his clients’ most complex accounting and financial reporting issues, creating a path through the dense regulatory framework and bodies of rules. He has a deep understanding of the demands associated with today’s accounting complexities and potential SEC reporting issues, primarily related to M&A, consolidation, reorganizations, and income taxes.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.