Is blue lagoon required to report the scuba tank operations

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Reference no: EM132825000

Blue Lagoon Inc., a publically-traded company, manufactures a wide variety of scuba diving equipment and supplies, in addition to owning a chain of retail scuba stores and scuba diving training centers. Eighteen months ago the company developed and began to market a new product line of oxygen tanks under various trade names. Sales and profitability of this product line during the current fiscal year greatly exceeded management's expectations. The new product line will account for 10 percent of the company's total sales and 12 percent of the company's operating income for this fiscal year. Additionally, Management believes sales and profits will be significant for several years. Blue Lagoon is concerned that its market share and competitive position may suffer if it discloses the volume and profitability of its new product line in its annual financial statements. Management is not sure how ASC 280 applies in this case.

Problem 1:
Is Blue Lagoon required to report the Scuba Tank operations as a separate segment? Please justify your opinion.

Problem 2: What options, if any, does Blue Lagoon, Inc. have with the disclosure of its new product line? Be sure to explain your answer and support your conclusions with references to the authoritative literature.

Reference no: EM132825000

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