Question: SMC Inc operates restaurants based on various themes such as

SMC Inc. operates restaurants based on various themes, such as Mex delight, Chinese for the Buffet, and Steak it and Eat-it. The Steak-it and Eat-it restaurants have not been performing well recently, but SMC prefers not to disclose these details for fear that competitors might use the information to the detriment of SMC. The restaurants are located in various geographical locations, and management currently measures profits and losses and asset allocation by restaurant concept. However, when preparing the segmental disclosures, the company reports the segment information by geo graphical location only. The company recently hired you to review the financial statements.
1. What disclosures should the company report for segment purposes?
2. The company's CEO believed that the rules are vague and that the company could easily support its decision to disclose the segment data by geographic regions. What would you recommend to the CEO and how would you approach the issues?

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  • CreatedMarch 13, 2015
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