SMC. Inc. Operates restaurants based on various themes, such as Mex - delight, Chinese for the buffet, and Steak it and eat it. The Steak-it and Eat-it restaurants have not been performing well recently, but SMC prefers not to disclose these details for fear that competitors might use the information for the detriment of SMC. The restaurants are located in various geographical locations and management currently measures profits and losses and asset allocation by restaurants concept. However, when preparing the segmental disclosures, the company reports the segment information by geographical location only. The company recently hired you to review the financial statements.
1. What disclosures should the company report for the segment purposes?
2.The company's CEO believed that the rules are vague and that the company could easily support it decision to disclose the segment data by geographic regions. What would you recommend to the CEO and how would you approach the issues.