Question

Q2: Company Z has a number of business segments. The Sales Revenue for four of Company Z’s segments is given below:

Belfast $2,000,000

Dublin $3,000,000

London $2,500,000

Kuwait $4,500,000

Total Revenue for Company Z is $11,500,000

Based on the above information only, which of the above segments are classified as reportable segments?

Select one:

a. Dublin and Kuwait

b. Kuwait Only

c. All Four Segments

d. None of these answers

e. Dublin Only

Answer 1

Answer: Option c. All Four Segments

As per provision, Company should consider those segments in report who’s revenue is 10% or more of the total revenue.

		Belfast	Dublin	London	Kuwait
(i)	Sales revenue	$    20,00,000	$    30,00,000	$    25,00,000	$    45,00,000
(ii)	Total revenue	$ 1,15,00,000	$ 1,15,00,000	$ 1,15,00,000	$ 1,15,00,000
(iii)	Share in total revenue [(i)/(ii)]*100	17.391%	26.087%	21.739%	39.130%

We can in above table, All of segment having more than 10% of revenue of the total revenue.

Thus, All four segments are reportable