MicroAlgo Inc. Segments Disclosure
Note 19 — Segments
ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments.
The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has two operating segments: (1) central processing algorithm services and (2) intelligent chips and services.
The following tables present summary information by segment for the years ended December 31, 2021 and 2022:
|
Central processing algorithm services |
Intelligent chips and services |
Total for the year ended December 31, |
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| Revenues | $ | 42,321,966 | $ | 39,713,323 | $ | 82,035,289 | ||||||
| Cost of revenues | $ | 15,016,980 | $ | 33,901,432 | $ | 48,918,412 | ||||||
| Gross profit | $ | 27,304,986 | $ | 5,811,891 | $ | 33,116,877 | ||||||
| Depreciation and amortization | $ | 379,642 | $ | 1,108,263 | $ | 1,487,905 | ||||||
| Total capital expenditures | $ | $ | 36,010 | $ | 36,010 | |||||||
|
Central Processing algorithm services |
Intelligent chips and services |
Total for the December 31, 2022 |
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| Revenues | $ | 66,578,301 | $ | 20,553,929 | $ | 87,132,230 | ||||||
| Cost of revenues | $ | 48,206,832 | $ | 19,973,507 | $ | 68,180,339 | ||||||
| Gross profit | $ | 18,371,469 | $ | 580,422 | $ | 18,951,891 | ||||||
| Depreciation and amortization | $ | 253,721 | $ | 1,120,961 | $ | 1,374,682 | ||||||
| Total capital expenditures | $ | 160,924 | $ | $ | 160,924 | |||||||
Total assets as of:
|
December 31, 2021 |
December 31, 2022 |
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| Central processing algorithm services | $ | 59,940,271 | $ | 47,787,032 | ||||
| Intelligent chips and services | 21,671,581 | 24,299,702 | ||||||
| Total assets | $ | 81,611,852 | $ | 72,086,734 | ||||
The Company’s operations are primarily based in the mainland PRC and international, where the Company derives a substantial portion of their revenues. Management also review consolidated financial results by business locations. Disaggregated information of revenues by geographic locations are as follows:
| Total for the year ended December 31, 2021 |
Total for the year ended December 31, 2022 |
|||||||
| Mainland PRC revenues | $ | 42,372,826 | $ | 66,751,637 | ||||
| Hong Kong revenues | 5,393,844 | |||||||
| International revenues | 34,268,619 | 20,380,593 | ||||||
| Total revenues | $ | 82,035,289 | $ | 87,132,230 | ||||
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.