Assignment:
Write an e-mail memo to Jan describing which criteria Calliope online courses needs to meet to be reported as a distinct segment of the company. Calliope has not reported business segments before, but the demand for its new online courses is high. Therefore, Jan would like to know what type of information is reported in connection with separate business segments of a company. Your e-mail memo should answer the following questions:
- What type of information should be analyzed with respect to the online courses and in class courses to determine if the online courses should be reported as a separate business segment?
- What information would Calliope need to disclose if the online course offerings did qualify as a business segment for financial reporting purposes?
- Where would Calliope's business segment information be reported if required?
Please view for additional information on the project scenario.
Project Scenario:
Hi, I'm Jan Waters, the controller for Calliope Knowledge Solutions. Welcome to the company. It's good to have you with us. I wanted to talk to you about your new project.
As you know, Calliope provides professional education courses. Our top priorities are to offer a low cost product, and exceed market competition and product innovation and customer service.
Our students are busy and need to balance home, work, and other commitments. Through feedback and surveys, we learned that students want courses they can access any time: days, nights, and weekends.
To accommodate this, we recently started offering Internet-based courses. These courses allow our students to learn on their schedule; they are no longer tied to a traditional classroom.
It's important that we respond to our customers, and offer innovative products that suit their needs. In addition, Internet-based education allows us to further enhance revenue and cash flows and tap into an international demand for continuing professional education.
The courses have become very popular...so much so, in fact, that we have higher than anticipated demands for online enrollment and course rollouts. While this is a very positive development for Calliope, it means we have a lot of issues to look at.
Several potential expansion plans are currently being developed and we hope to implement one soon.
This is where your role as a financial analyst comes in. Evelyn Stanfill, our CEO, has requested an overview of how these plans will affect the company's financial statements. We need to see how our balance sheet, income statement, statement of cash flows, and statement of shareholder's equity will be affected by an expansion.
Depending on which expansion method we choose, the financial reports we send to our shareholders next year could look very different.
Once you have finished the overview, I will review your work, then go over it with our vice-president of finance, Connie Esmond. Connie will then present the data to Evelyn.
I hope you're looking forward to this project. We're glad to have your help with this next step in Calliope's development.