F1- Segment Reporting

Question 1

Segment reporting scope

Answer 1

for public companies only

Question 2

materiality test- 10% size test

Answer 2

a. revenue: if sales to external customers and intersegment sales/transfers (excluding interest income on advances/loans to other segments) is 10% or more of combined revenue of all operating segments

b. reported profit or loss-meets size test if absolute amount of reported profit or loss is =>10% in absolute amt of either:
1. combined reported profit of all operating segments that did NOT report a loss is => 10%
2. combined reported loss of all operating segments =>10%

c. assets: meets size test if assets =>10% of combined assets of all operating assets: iclude measure of segment’s assets reviewed by chief operating decision maker

Question 3

materiality test- 75% reporting sufficiency test

Answer 3

if external consolidated revenue reported by operating segments <75% external consolidated revenue, additional operating segments need to be identified (practical limit 10)

Question 4

segment formula

Answer 4

revenues

=operating profit/loss for that segment