Segment footnote disclosures, investor views

February 2013
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Segment footnote disclosures, investor views

At a glance

US accounting standards require public companies to disclose, in their financial statement footnotes, segment data based on the “management approach,” under which investors are provided with a view of the business through the eyes of management.

The segment footnote that accompanies the financial statements presents information about the different types of business activities of a company (e.g., the products and services a company provides), and the different geographies in which it operates. This information can help financial statement users to better understand a company’s performance, assess its prospects for future cash flows, and make more informed judgments about the company as a whole.