CFA Practice Question

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CFA Practice Question

To help analyze financial statements for diversified companies, which of the following does FASB require to be reported separately for each segment?

I. Profit or loss
II. Certain revenue and expense items
III. Assets
Correct Answer: I, II and III

To help analyze financial statements for diversified companies, FASB requires that each segment report separately its profit or loss as well as certain revenue and expense items and assets.

User Contributed Comments 3

User Comment
copus It appears that Wall Street is pretty lazy when it comes to analyzing diversified companies. A good example is Warren Buffett´s Berkshire Hathaway (probabely the most diversified company in the world with interest in candy, furniture, newspapers, soft drinks, jewelry, insurance, reinsurance, timeshare for executive jets inter alia). The last time I looked, the number of analysts covering the stock was! I am sure that this comment will have a net assistance coefficient for the exam of exactly zero as well!
DS12 Where did you read that no analysts are covering Berkshire. Im not saying you're wrong, it just seems like an interesting statement.
Kobe8kenji My Prof once mentioned that it is extremely difficult to accurately analyse a diversified company. It is also extremely tedious as well. No analyst will dare to risk their reputation/credibility analyzing it.
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