Section 1: 30–40%1A7
Notes to the Financial Statements
Segment reporting tests whether you know the quantitative thresholds — 10% revenue, 10% profit/loss, 10% assets — and AICPA mixes them in tricky ways. For interim reporting, the big trap is the effective tax rate: you must use the estimated annual effective tax rate (AETR) for each quarter, not the statutory rate. Candidates who compute quarterly taxes independently get this wrong every time.
What AICPA Wants You to Know
- 1Identify the required notes under US GAAP and understand the 'full disclosure' principle
- 2Describe the required content of the Summary of Significant Accounting Policies note
- 3Apply fair value disclosure requirements (ASC 820 three-level hierarchy in the notes)
- 4Recognize what triggers required disclosure vs. accrual for contingencies and commitments
- 5Identify when segment information is required and what must be disclosed
- 6Explain subsequent events disclosure requirements