Disclosure Requirements on Accounting Policies

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Segmented Reporting

This style of reporting refers to the reporting of the different operating segments of a business entity and should be included in the financial statements under disclosures. Segmented reporting is required by GAAP and the IFRS for publicly traded companies and not for privately held companies. This information’s intention is to provide information to the investors and creditors the financial position of the most important operating units of a particular company.

The information that should be in the disclosures regarding segmental reporting are:

- Revenues

- Interest expenses

- Depreciation and amortization

- Material expense

- Profit and Losses

- Income taxes

- Products or services rendered by each segment

The benefits of a company using segmental reporting that this allows for a clear understanding of the operations of each segment of the company; in Verizon Communications they have their business broken down into two parts: Wireless and Wireline. By separating these two segments Verizon is able to properly analyze the growth of each segment and more accurately determine the marketplace trends. Although there are some disadvantages to segmented reporting because the data could be more easily altered in each segment to present a more favorable outcome; also segmented reporting is focused more on the short-term growth rather than long-term.

Auditor’s Report

The auditor’s report is a written opinion of the auditor of that particular financial report. This report is often written in a standard format and does allow for certain variation that will depend upon the nature of the business and what type of reporting the auditor specializes in. An audit report usually consists of the responsibilities of the auditor to the management of the business, the basic scope of the audit and lastly the auditor’s opinion regarding the financial statements. This report must be done by a third party and someone that does not have any legal ties to the business they are analyzing, so that a clean opinion may be presented to lenders and shareholders.

References

Gibson, Charles H. (2012). Financial Reporting and Analysis + Thomsonone Printed Access

Card. South-Western Pub.

Mirza, A. A., & Nandakumar, A. (2012). Wiley International Trends in Financial Reporting

Under IFRS : Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP.

Hoboken, N.J.: Wiley.

2015 Verizon Annual Report www.verizon.com/.../annual/verizon-annual-

2015/downloads/15_vz_ar.pdf