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As discussed in ASC 280-10-50-34, a reporting entity may change its organizational structure during an interim period. Alternatively, a previously immaterial segment may become material. If that change results in a change in reportable segment information in the interim period, the financial statements should be prepared on the basis of the new segments that were created during the current interim period. The previously issued interim financial statements are not required to be amended. However, the interim information for those previously filed quarters will need to be revised (unless it is immaterial or impracticable) when the quarters are presented for comparative purposes in the following year’s interim filings.
Question FSP 25-17 addresses how interim changes in the management reporting structure impact segment reporting.
Question FSP 25-17
If changes in a reporting entity’s internal management reporting structure changes its basis for segment reporting during an interim period, must full footnote disclosure be provided in the interim period condensed financial statements as if the revision had been reported in a complete set of annual financial statements included in the Form 10-K?
PwC response
No. Full footnote disclosures are not required. However, ASC 280-10-50-34 and ASC 280-10-50-35 require that the limited interim period information be revised and provided in the quarterly report. ASC 280-10-50-32(e) also requires the interim financial statements to describe differences in the basis of segmentation or in the basis of measurement of segment profit or loss from the last annual report. Certain line items required for the annual footnote disclosure by ASC 280-10-50-22 and ASC 280-10-50-25 may be omitted from the condensed financial statements included in the interim period quarterly report.
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