Can a R&D organization qualify as an operating segment?
R&D function
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Can a R&D organization qualify as an operating segment?
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An R&D function could potentially qualify as an operating segment even if it doesn’t recognize revenue if there is discrete financial information available and the operating results are reviewed regularly by the CODM. However, functional organizations or cost centers that are support functions or incidental to the business would not be considered operating segments. I would also look at other companies in your industry to see if they view the R&D function as a separate segment.