Big Islands Amusement Park Case Study
To: Professor John Li Department of Economics Hunter College
From: Yuen Mei Hau
Re: Big Islands Amusement Park
Date: November 14, 2017
Summary: This article is talking about the chief operating decision maker of Big Islands and the operating segments for Big Islands. Also, how the company to aggregate the operating segments identified into a single reportable segment for financial statement disclosure.
Who is the Chief Operating Decision Maker (CODM) of Big Islands?
Consistent with FASB codification ASC 280-10-50-5 states that “The term "chief operating decision maker" refers to a function, not necessarily …show more content…
A manager may be a division manager for multiple operating segments.” In this case we spotted that the operating results are monthly reviewed by segment management who is the president of each park. The president has to report monthly and has to meet with the CEO of Big Islands so as to discuss budget and forecast. Each president is a segment manager for each park. As each president receives and reviews business performance and financial activities, as well participates in budget and forecast we may consider each president as operating decision maker for each …show more content…
According to ASC 606-10-65-1 said that “An operating segment is an integral part of a public entity that has all of the following characteristics:
a. It engages in business activities that generate revenue and generate costs (including revenues and expenses for transactions with other components of the same public entity).
b. Its operating results are regularly reviewed by the chief operating decision maker of the public agencies to decide on the allocation of resources to the divisions and to assess their performance.
c. Its discrete financial information is available.
So, if Big Islands is a public company, it’s very necessary to identify and report its different operating segments. As mentioned in the previous question, each amusement park is run for profit, and the president of each park checks operational and financial results and reports to the chief executive. Therefore, Big Islands has ten operating segments under ASC 606-10-65-1. There are Big Islands Georgia, North Carolina, Washington, Still Water Thrills Orlando and Still Water Thrills Charlotte., White Rapids Orlando, Discovery Adventure Place, Island Adventure Cove, White Rapids LA and Adventure Kids