Question

The threshold revenue test for determining whether to separately disclose an operating segment is 10 per cent or more of 'reported revenue'. Which 'revenue' accounts are to be included?

	A.	External total revenues of all activities within the business
	B.	Internal total revenues of all activities within the business
	C.	External revenues of operating segments
	D.	Internal revenues of operating segments
	E.	Internal and external revenues of operating segments

Answer 1

Answer (E) is correct answer.

An entity shall report separately information about an operating segment that meets any of the following quantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are 10 per cent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if management believes that information about the segment would be useful to users of the financial statements.