Question

ASC 280 requires certain disclosures about major customers. All of the following statements about those disclosures are true with the exception of which statement?

A) Disclosures must be made if revenue from a customer is 10% or more of total revenue.
B) Disclosures must include information about the products and services provided to major customers.
C) Disclosures must be made even if the customer is a governmental entity.
D) Disclosures are not required if the segment's revenue is immaterial.

Answer 1

The false statement regarding ASC 280 is that disclosures are not required if the segment's revenue is immaterial. In fact, ASC 280 mandates disclosure of any major customer that accounts for more than 10% of total revenue, regardless of whether it is a governmental entity or not.

Step-by-step explanation:

The exception to the statements regarding disclosures about major customers according to ASC 280 is: D) Disclosures are not required if the segment's revenue is immaterial.

This statement is false because ASC 280-10-50-40 requires an entity to provide disclosure about its major customers if revenue from a single customer amounts to 10% or more of the entity's total revenue.

This disclosure must be made even if the customer is a governmental entity, but there is no explicit requirement to provide detailed information about the products and services provided.

option d). Disclosures are not required if the segment's revenue is immaterial.