Question

Q10: The Chief Financial Officer (CFO) of a large UK firm has applied the three individual tests for identifying reportable segments and has identified 4 (i.e., 4 reportable segments). The total revenue of the firm is $200 million and the Net Income is $10 million. However, the CFO now needs to be informed that the combined Revenue of all selected Reportable Segments must exceed which of the following amounts:  

Select one:

a. $7.5 million

b. Zero

c. None of these answers

d. $150 million

e. $200 million

Answer 1

One of the condition for segment reporting is the reportable segment should have 75% of total revenue.

Here total revenue is $200 million

so reportable segment should have minimum 75% revenue of $200 million i.e. $200 million * 75% = $150 million.

Hence option D is correct.

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