Chapter 13
Operating segment
Problem 13-1
Timmy Company provided the following information in relation to revenue earned by
operating segments for the current year:
Segment
Alo
Bix
Cee
Dill
Combined
Elimination
Consolidated
Sales to
unaffiliated
customers
5,000
8,000
4,000
43,000
60,000
60,000
Intersegment sales
Total revenue
3,000
4,000
16,000
23,000
(23,000)
-
8,000
12,000
4,000
59,000
83,000
(23,000)
60,000
What total revenue should be disclosed by the reportable segments?
a.
b.
c.
d.
60,000
83,000
71,000
51,000
Answer:
Bix
Dill
Total revenue
12,000
59,000
71,000
Problem 13-2
Correy Company provided the following data relating to operating segments:
Industry
revenue
profit
total assets
A
10,000,000
1,750,000
20,000,000
B
8,000,000
1,400,000
17,500,000
C
6,000,000
1,200,000
12,500,000
D
3,000,000
550,000
7,500,000
E
4,250,000
675,000
7,000,000
F
1,500,000
225,000
3,000,000
How many reportable segments does Correy have?
a.
b.
c.
d.
Three
Four
Five
Six
Answer:
Revenue
30.53%
24.43%
18.32%
9.16%
12.98%
4.58%
100.00%
A
B
C
D
E
F
Profit
30.17%
24.14%
20.69%
9.48%
11.64%
3.88%
100.00%
Assets
29.63%
25.93%
18.52%
11.11%
10.37%
4.44%
100.00%
A, B, C, D and E reportable because their revenue or operating profit or asset is at least
10% of the combined amount.
Problem 13-3
Aurora Company provided the following profit (loss) relating to operating segments:
V
W
X
Y
Z
3,400,000
1,000,000
(2,000,000)
400,000
( 200,000)
What are the reportable segments based on profit or loss?
a.
b.
c.
d.
V, W, X and Y
V, W and X
V and W
V, W, X, Y and Z
Answer:
V
W
X
Y
Z
3,400,000
1,000,000
2,000,000
400,000
4,800,000
200,000
2,200,000
The total profit figure is the basis for identifying the reportable segments because it is
higher than the total loss figure. Accordingly, those segments with profit or loss of at
least 10% of P4,800,000 or P480,000 are reportable. Thus V, W and X are reportable
Problem 13-4
Macbeth Company, an entity listed on a recognized stock exchange, reports operating
results from a North American division to the chief operating decision maker.
The segment information for the current year is as follows:
Revenue
Profit
Assets
Number of employees
3,800,000
1,200,000
1,600,000
2,500
The entity’s result for all of the segments in total are:
Revenue
Profit
Assets
Number of employees
40,000,000
10,000,000
20,000,000
25,000
Which piece of information determines that the North American division is a reportable
segment?
a.
b.
c.
d.
Revenue
Profit
Assets
Number of employees
Answer:
1,200,000/10,000,000
12%
Problem 13-5
Aris Company provided the following information in relation to operating for the current
year:
Sales to unaffiliated customers
Intersegment sales of products similar to those sold
to unaffiliated customers
Interest earned on loans to other industry segments
20,000,000
5,000,000
1,000,000
The entity and all of its division are engaged solely in manufacturing operations.
Under the revenue test, what is the minimum revenue of a reportable segment?
a.
b.
c.
d.
2,500,000
2,600,000
2,100,000
2,000,000
Answer:
Sales to unaffiliated customers
Intersegment sales
Interest earned on loans
Total segment revenue
Revenue criterion (10% x 26,000,000)
20,000,000
5,000,000
1,000,000
26,000,000
2,600,000
Problem 13-6
Grum Company is subject to the requirements of segments reporting. In the income
statement for the current year, the intersegment sales of P10,000,000, expenses of
P47,000,000 and net income of P3,000,000. Expenses included payroll costs of
P15,000,000.
The combined total assets of all operating segments at year-end amounted to
P45,000,000.
1. What is the minimum amount of sales to a major customer?
a.
b.
c.
d.
5,000,000
4,000,000
6,000,000
4,500,000
Answer:
10% x 45,000,000
4,500,000
2. What is the minimum amount of external revenue to be disclosed by reportable
segments?
a. 22,500,000
b. 30,000,000
c. 33,750,000
d. 37,500,000
Answer:
75% x 45,000,000
33,750,000
Problem 13-7
Graf Company discloses supplemental operating segment information. The following
information is available for the current year:
Segment
X
Y
Z
Sales
5,000,000
4,000,000
3,000,000
Traceable expenses
3,000,000
2,500,000
1,500,000
Additional expenses
Indirect segment expenses
General corporate expenses
Interest expense
Income tax expense
1,800,000
1,200,000
600,000
400,000
The interest expense and income tax expense are regularly reviewed by the chief
operating decision maker as a measure of profit or loss.
Appropriate common expenses are allocated to segments based on the ratio of a
segment’s sales to total sales.
What is Segment Z’s operating profit?
a.
b.
c.
d.
900,000
950,000
800,000
500,000
Answer:
Sales
3,000,000
Traceable expenses
(1,500,000)
Indirect expenses (25% x 1,800,000)
( 450,000)
General Corporate expenses (25% x 1,200,000) ( 300,000)
Interest expense (25% x 600,000)
( 150,000)
Income tax expense (25% x 400,000)
( 100,000)
500,000
Problem 13-8
Clay Company has three lines of business, each of which was determined to be
reportable segment. Sales aggregated P7,500,000 in the current year, of which
Segment One contributed 40%.
Traceable costs were P1,750,000 for Segment One out of a total of P5,000,000 for the
entity as a whole.
The entity allocates common costs of P1,500,000 based on the ratio of a segment’s
income before common costs to the total income before common costs.
What amount should be reported as operating profit for Segment One?
a. 1,250,000
b. 1,000,000
c.
650,000
d. 500,000
Answer:
Segment 1
Sales
3,000,000
Traceable costs
(1,750,000)
Profit before common cost
1,250,000
Common cost (1,250,000/2,500,000 x1,500,000) ( 750,000)
Segment profit
500,000
Total revenue
7,500,000
(5,000,000)
2,500,000
(1,500,000)
1,000,000
Problem 13-9
Hyde Company has three reportable segments. Common costs are appropriately
allocated on the basis of sales.
In the current year, Segment A had sales of P3,000,000, which was 25% of Hyde’s total
sales, and had traceable costs of P1,900,000.
In the current year, the entity incurred segment costs of P500,000 that were not directly
traceable to any of the divisions.
Segment A incurred interest expense of P300,000 in the current year. Interest expense
is included in the measure of profit or loss.
What amount should be reported as Segment A’s profit for the current year?
a.
b.
c.
d.
875,000
900,000
975,000
675,000
Answer:
Sales – Segment A
Expenses:
Traceable cost
Allocated indirect cost (25% x 500,000)
Interest expense
Segment profit
3,000,000
1,900,000
125,000
300,000
2,325,000
675,000
Problem 13-10
Eagle Company operates in several different industries. Total sales for the entity totaled
P14,000,000, and total common costs amounted to P6,500,000 for the current year.
For internal reporting purposes, the entity allocates common costs based on the ratio of
a segment’s sales to total sales.
Segment
1
2
3
4
5
Contribution to total sales
25%
12%
31%
23%
9%
Costs specific to the segment
1,100,000
1,000,000
1,300,000
880,000
400,000
What is the operating profit of Segment 1?
a. 3,500,000
b. 1,875,000
c. 2,400,000
d. 775,000
Answer:
Sales – Segment 1 (25% x 14,000,000)
Specific cost – Segment 1
Allocated common costs (25% x 6,500,000)
Operating profit
3,500,000
(1,100,000)
(1,625,000)
775,000
Problem 13-11
Colt Company has four manufacturing divisions, each of which has been determined to
be a reportable segment. Common costs are appropriately allocated on the basis of
each division’s sales in relation to Colt’s aggregate sales. Colt’s Delta division
accounted for 40% of Colt’s total sales in the current year.
For the current year, Delta division had sales of P8,000,000 and traceable costs of
P4,800,000. In addition, the Delta division incurred interest expense of P640,000. In the
current year, Colt incurred costs of P800,000 that were not directly traceable to any of
the divisions.
It is an entity policy that interest expense is included in the measure of profit or loss that
is reviewed by the chief operating decision maker.
What amount should be disclosed as Delta’s profit for the current year?
a.
b.
c.
d.
3,200,000
3,000,000
2,880,000
2,240,000
Answer:
Sales – Delta’s
Traceable costs
Interest expense
Incurred cost (40% x 800,000)
Profit
8,000,000
(4,800,000)
( 640,000)
( 320,000)
2,240,000
Problem 13-12
Taylor Company assesses performance and makes operating decisions using the
following information for the reportable segments:
Total revenue
Total profit or loss
9,000,000
1,500,000
The total profit and loss included intersegment profit of P300,000. In addition, the entity
had P100,000 of common costs for the reportable segments that are not allocated in
reports provided to the chief operating decision maker.
For purposes of segment reporting, what amount should be reported as segment profit?
a.
b.
c.
d.
1,400,000
1,200,000
1,800,000
1,500,000
Answer:
Total profit or loss
Common cost
Segment profit
1,500,000
( 100,000)
1,400,000
Problem 13-13
Diversity Company had total assets of P65,000,000 at year-end and provided the
following condensed income statement for the current year:
Sales
Expenses
Income before income tax
Income tax expense
Net income
45,000,000
(33,000,000)
12,000,000
( 3,800,000)
8,200,000
The entity has two reportable segments and has developed the following related
information:
Sales
Segment expenses
Segment assets
Segment A
Segment B
Others
25,000,000
18,000,000
35,000,000
15,000,000
9,000,000
18,000,000
5,000,000
4,000,000
7,000,000
The total assets of P65,000,000 include general corporate assets of P5,000,000.
The total segment expenses of P33,000,000 include general corporate expenses of
P2,000,000.
The chief operating decision maker does not allocate income tax as a measure of profit
or loss.
Required:
1. Prepare the necessary disclosures for Diversity Company in relation to operating
segments.
2. Prepare the reconciliations between segment information and amount shown in the
entity’s financial statements.
Answer:
Disclosure of profit or loss and assets
Sales
Profit or loss
Total assets
Segment A
Segment B
Others
Total
25,000,000
7,000,000
35,000,000
15,000,000
6,000,000
18,000,000
5,000,000
1,000,000
7,000,000
45,000,000
14,000,000
60,000,000
Reconciliation
Revenue
Revenue of reportable segments
Revenue of nonreportable segments
Entity revenue shown in income statement
40,000,000
5,000,000
45,000,000
Profit and loss
Profit or loss of reportable segments
Profit or loss of nonreportable segments
Corporate expenses
Unallocated income tax expense
Entity net income shown in income statement
13,000,000
1,000,000
( 2,000,000)
( 3,800,000)
8,200,000
Total assets
Total assets of reportable segments
Total assets of nonreportable segments
General corporate assets
Entity total assets shown in statement of financial position
53,000,000
7,000,000
5,000,000
65,000,000
Problem 13-14
Congo Company does business in several different industries. The condensed income
statement for the entire entity for the current year is as follows:
Sales
Costs of goods sold
Gross income
Expenses
Depreciation
Income tax expense
Net income
60,000,000
(28,000,000)
32,000,000
(14,000,000)
( 4,000,000)
( 4,000,000)
10,000,000
The entity has two major reportable segments, X and Y. an analysis reveals that
P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are
related to general corporate activities.
The chief operating decision maker allocates income tax expense to reportable
segments as a measure of profit or loss.
The expenses and sales are directly allocable to segment activities according to the
following percentages:
Segment X
Sales
Costs of goods sold
Expenses
Depreciation
Income tax expense
40%
35
40
40
50
Segment Y
45%
50
40
45
40
Others
15%
15
20
15
10
Required:
1. Prepare a schedule that reports the segment profit or loss.
2. Prepare the disclosures required for operating segments.
3. Prepare the reconciliations between segment information and amounts shown in the
entity’s financial statements.
Answer:
Segment X
Sales
24,000
Cost of goods sold ( 9,800)
Gross income
14,200
Segment expenses ( 4,800)
Depreciation
( 1,200)
Income tax expense ( 2,000)
Segment profit or loss 6,200
Segment Y
27,000
(14,000)
13,000
( 4,800)
( 1,350)
( 1,600)
5,250
Others
9,000
(4,200)
4,800
(2,400)
( 450)
( 400)
1,550
Total
60,000
(28,000)
32,000
(12,000)
( 3,000)
( 4,000)
13,000
Segment Y
27,000
5,250
1,350
Others
9,000
1,550
450
Total
60,000
13,000
3,000
Disclosure of segment profit or loss
Sales
Profit or loss
Depreciation
Segment X
24,000
6,200
1,200
Reconciliation
Revenue
Revenue of reportable segments
Revenue of nonreportable segments
Entity revenue shown in income statement
51,000,000
9,000,000
60,000,000
Profit and loss
Profit or loss of reportable segments
Profit or loss of nonreportable segments
Unallocated depreciation
General corporate expenses
Entity net income shown in income statement
11,450,000
1,550,000
( 1,000,000)
( 2,000,000)
10,000,000
Problem 13-15
Easy Company provided the following statement of financial position at year-end and
income statement for the current year:
Current assets
Property, plant and equipment
Goodwill
Investment in associate
130,000
500,000
100,000
70,000
Total assets
800,000
Current liabilities
Noncurrent liabilities
Share capital
Retained earnings
90,000
60,000
400,000
250,000
Total liabilities and equity
800,000
Revenue
Cost of goods sold
Gross profit
Other income
Distribution cost
Administrative expenses
Other expenses
Finance cost
Share in profit of associate
1,800,000
(1,200,000)
(
(
(
(
600,000
60,000
200,000)
100,000)
50,000)
60,000)
10,000
Income before tax
Income tax expense
(
Net income

170,000
The entity is organized for management purposes into three major operating
segments, namely furniture, stationery and computer products. There are other
smaller operating segments.
Furniture
Stationery
Computer products
Other segments



260,000
90,000)
External sales
Intersegment sales
800,000
500,000
400,000
100,000
200,000
150,000
50,000
The costs of goods sold, distribution cost, administrative expenses and finance cost
can be allocated as 50% to furniture, 25% to stationery, 20% to computer products,
and 5% to other segments.
The cost of sales related to intersegment sales amounted to P24,000,000 to be
allocated as 50% to furniture, 40% to stationery, and 10% to computer products
The segment assets and liabilities are as follows:
Furniture
Stationery
Computer products
others
Current
Asset
Property,
Plant and
Equipment
Goodwill
80,000
40,000
5,000
2,000
300,000
60,000
100,000
30,000
85,000
10,000
3,000
-
Total asset
440,000
170,000
100,000
5,000
45,000
30,000
8,000
1,000
30,000
20,000
7,000
2,000
Total liabilities 75,000
50,000
15,000
3,000
Current
Liabilities
Noncurrent
Liabilities
The remaining assets and liabilities are general corporate assets and liabilities are
general corporate assets and liabilities identified with the entity as a whole.


The other income and other expenses are not allocated to the operating segments
as a measure of profit or loss.
The chief operating decision maker does not allocate income tax expense to
reportable segments as a measure of profit or loss.
Required:
1. Determine the profit or loss for all the operating segments.
2. Prepare the disclosure required for operating segments.
3. Prepare the necessary reconciliations between the segment information and
amounts shown in the entity’s financial statements.
Answer:
Segment profit or loss
External
sales
Intersegment
sales
Total revenue
Cost of sales
– external
Cost of sales
– internal
Gross profit
Distribution
cost
Administrativ
e expense
Finance cost
Segment
profit or loss
Furniture
Stationery
Computer
Others
Total
800,000
500,000
400,000
100,000
1,800,000
200,000
150,000
50,000
-
400,000
1,000,000
(600,000)
650,000
(300,000)
450,000
(240,000)
100,000
(60,000)
2,200,000
(1,200,000)
(120,000)
(96,000)
(24,000)
-
(240,000)
280,000
(100,000)
254,000
(50,000)
186,000
(40,000)
40,000
(10,000)
760,000
(200,000)
(50,000)
(25,000)
(20,000)
(5,000)
(100,000)
(30,000)
100,000
(15,000)
164,000
(12,000)
114,000
(3,000)
22,000
(60,000)
400,000
Furniture
Stationery
Computer
Others
Total
800,000
500,000
400,000
100,000
1,800,000
200,000
150,000
50,000
-
400,000
100,000
164,000
114,000
22,000
400,000
Minimum disclosures
External
sales
Intersegmen
t sales
Profit or loss
Finance cost
Total assets
Total
liabilities
30,000
440,000
75,000
15,000
170,000
50,000
12,000
100,000
15,000
3,000
5,000
3,000
60,000
715,000
143,000
Reconciliation
Revenue
Sales of reportable segments
Sales of nonreportable segments
Elimination of intersegment sales
Entity sale in income statement
2,100,000
100,000
( 400,000)
1,800,000
Profit and loss
Profit or loss of reportable segments
Profit or loss of nonreportable segments
Elimination of intersegment profit
Share in profit of associate
Unallocated items:
Other income
Other expenses
Income tax expense
Entity net income in income statement
378,000
22,000
(160,000)
10,000
Intersegment sales
Cost of sales – intersegment sales
Intersegment gross profit
400,000
(240,000)
160,000
60,000
(50,000)
(90,000)
170,000
Total assets
Total assets of reportable segments
Total assets of nonreportable segments
Investment in associate
General corporate assets
Entity total assets
710,000
5,000
70,000
15,000
800,000
Total liabilities
Total liabilities of reportable segments
Total liabilities of nonreportable segments
General corporate liabilities
Entity total liabilities
140,000
3,000
7,000
150,000
Problem 13-16
Revlon Company provided the following data for the current year.
Segments
1
2
3
4
5
6
7
Others



Revenue
Profit (loss)
620,000
100,000
340,000
190,000
180,000
70,000
120,000
380,000
200,000
20,000
70,000
( 30,000)
( 25,000)
10,000
( 20,000)
( 25,000)
Assets
400,000
80,000
300,000
140,000
180,000
120,000
140,000
140,000
The “others category includes five operating segments, none of which has revenue
or assets greater than P80,000 and none with an operating profit.
Operating Segments 1 and 2 produce very similar products and use very similar
production processes, but serve different customer types and use quite different
product distribution system. These differences are due in part to the fact that
Segment 2 operates in a regulated environment while Segment 1 does not.
Operating Segments 6 and 7 have similar products, production processes, product
distribution systems, but are organized as separate division since they serve
substantially different types of customers. Neither Segments 6 and 7 operate in a
regulated environment.
Required:
1. Determine the reportable segments without regard to aggregation criteria.
2. If the 75% overall size test for reportable segments is not yet met, identify additional
reportable segments.
3. What are the reportable segments after considering all factors?
Answer:
Segments
1
2
3
4
5
6
7
Others
Revenue
Profit (loss)
620,000
100,000
340,000
190,000
180,000
70,000
120,000
380,000
200,000
20,000
70,000
( 30,000)
( 25,000)
10,000
( 20,000)
( 25,000)
Assets
400,000
80,000
300,000
140,000
180,000
120,000
140,000
140,000
Total
2,000,000
200,000
1,500,000
1. The information above shows that any operating segment with revenue equal to
or greater than P200,000 is a reportable segment (segments 1 and 3). Any
segment with identifiable assets greater than P150,000 is a reportable segments
1, 3, and 5). The total profit for all segments with profit totals P300,000. As a
result, any segment with an operating profit or loss equal to or greater than an
absolute amount of P30,000 is a reportable segment (segments 1, 3 and 4).
Thus, Segments 1, 3, 4 and 5 are reportable segments.
2. The revenue of the reportable segment
Segment 1
3
4
5
Total revenue
620,000
340,000
190,000
180,000
1,330,000
Percentage (1,330,000 / 2,000,000)
If the total external revenue attributable to reportable segments constitutes less
than 75% of the total entity revenue, additional segment shall be identified even if
they do not meet the 10%, threshold segments that are below the 10% threshold
can be aggregated as one segment if they share a majority of the five factors in
identifying a business segment, namely:
a.
b.
c.
d.
e.
Nature of product
Nature of production process
Class of customer
Method of distributing product
Regulated environment
Since segments 6 and 7 are similar in four of the five criteria, they can be
aggregated as one reportable segment.
Revenue
Profit (loss)
Segment assets
Segment 6 Segment &
70,000
120,000
10,000
( 20,000)
120,000
140,000
Total
190,000
( 10,000)
260,000
With segments 6 and 7 considered as one reportable segment, the total segment
revenue increases to P1,520,000 or 76% of the total. The 75% requirement has
been met.
Revenue of reportable segments before aggregation
Revenue of additional reportable segments
Total
1,330,000
190,000
1,520,000
Percentage (1,520,000 / 2,000,000)
76%
3. In conclusion, Segments 1, 3, 4, 5, and Segments 6 and 7 (combined) shall be
considered reportable segments.
Problem 13-17
Universal Company has two different product lines and makes significant sales both in
the Philippines and Japan.
The entity has compiled the following information
Product A
Philippines
Japan
Revenue
1,000,000
Segment profit or loss 250,000
Depreciation
150,000
Property, plant and
Equipment
500,000
Segment assets
1,200,000
Segment liabilities
700,000
Capital expenditures
200,000
Product B
Philippines
Japan
1,500,000
400,000
200,000
4,000,000
500,000
800,000
2,000,000
200,000
500,000
600,000
1,400,000
600,000
400,000
2,500,000
6,000,000
4,000,000
1,000,000
1,500,000
4,000,000
2,000,000
300,000
Required:
1. Universal Company has structured its operations internally into two division based
on two products, A and B
Prepare the disclosures required in relation to operating segments.
2. Prepare the entity-wide disclosure about geographical areas to conform with the
requirement of segment reporting.
Answer:
1. Minimum disclosures under PFRS:
Revenue
Segment profit or loss
Depreciation
Total assets
Total liabilities
Capital expenditures
Product A
2,500,000
650,000
350,000
2,600,000
1,300,000
600,000
Product B
6,000,000
700,000
1,300,000
10,000,000
6,000,000
1,300,000
Total
8,500,000
1,350,000
1,650,000
12,600,000
7,300,000
1,900,000
2. Entity-wide disclosure about geographical areas:
Revenue
Noncurrent assets - PPE
Philippines
5,000,000
3,000,000
Japan
3,500,000
2,100,000
Total
8,500,000
5,100,000
Problem 13-18
1. If a financial report contains both the consolidated financial statements of a parent
and the parent’s separate financial statements, segment information is required in
a.
b.
c.
d.
The separate financial statements
The consolidated financial statements
Both the separate and consolidated financial statements.
Neither the separate nor the consolidated financial statements
2. When an operating segment is reportable?
a. The segment external and internal revenue is 10% or more of the combined
external and internal revenue of all operating segments
b. The segment profit or loss is 10% or more of the greater between the
combined profit of all profitable operating segments and the combined loss
of all unprofitable operating segments
c. The assets of the segment are 10% or more of the total assets of all operating
segments
d. Under all of these circumstances.
3. In financial reporting for operating segments, and entity shall disclose all of the
following, except
a. Types of products and services from which each reportable segment derives
revenue
b. The title of the chief operating decision maker of each reportable segment.
c. Factors used to identify the reportable segments.
d. The basis of measurement of segment profit or loss and segment assets.
4. Which statement is not true with respect to a chief operating decision maker?
a. The term chief operating decision maker identifies a function and not necessarily
a manager with specific title.
b. In some cases, the chief operating decision maker could be the chief operating
officer.
c. The board of directors acting collectively could qualify as the chief operating
decision maker.
d. The chief internal auditor would generally qualify as chief operating
decision maker.
5. What is the quantitative threshold for the revenue that must be disclosed by
reportable operating segments?
a. The total external and internal revenue of all reportable segments is 75% or more
of the entity external revenue.
b. The total external revenue of all reportable segments is 75% or more of entity
external and internal revenue.
c. The total external revenue of all reportable segments is 75% or more of the
entity external revenue.
d. The total internal revenue of all reportable segments is 75% or more of the entity
internal revenue.
6. Two or more operating segments may be aggregated into a single operating
segment if all of the following conditions are satisfied, except
a. The segments have similar characteristics.
b. The segments share a majority of the nature of product or service, nature of
production process, class of customer, method of product distribution and
regulatory environment.
c. The aggregation is consistent with the core principles of segment reporting.
d. The segments have dissimilar characteristics.
7. Operating segments that do not meet any of the quantitative thresholds
a. Cannot be considered reportable.
b. May be considered reportable and separately disclosed if management
believes that information about the segment would be useful to the users
of the financial statements.
c. May be considered reportable and separately disclosed if the information is for
internal use.
d. May be considered reportable and separately disclosed if this is the practice
within the economic environment in which the entity operates
8. Which of the following is a required enterprise-wide disclosure regarding external
customers?
a. The entity of any external customer considered to be major by management
b. The identity of any external customer providing 10% or more of a particular
operating segment revenue
c. Information on major customers is not required in segment reporting
d. The fact that transactions with a particular external customer constitute at
least 10% of the total entity revenue
9. IFRS 8 requires that an entity should provide reconciliations of segment information.
Which of following is not a required reconciliation?
a. The total of the reportable segments’ revenue to the entity’s revenue
b. The total of the reportable segments’ profit or loss to the entity’s profit or loss
before tax expense and discontinued operating
c. The total number of major customers of all segments to the total number of
major customers of the entity
d. The total of the reportable segments’ assets to the entity’s assets
10. An operating segment is considered reportable when any of the following conditions
is met, except
a. Segment revenue is 10% or more of the combined revenue of all of the entity’s
segments.
b. Segment assets are 10% or more of the combined assets of all segments.
c. Segment liabilities are 10% or more of the combined liabilities of all
segments.
d. Segment’s operating profit or operating loss is 10% or more of the combined
operating profit of all segments that did not incur an operating loss.