FAR 1.9 Segment Reporting

Question 1

REPORTABLE SEGMENT

Answer 1

Thereportable segment has to meet one of the following requirements:-
1. 10% Revenue test:The segment’s revenue is greater than or equal to 10% of company’s total revenue including inter-company or inter-segment sales/transfers
2. 10% Profit/Loss test: Thesegment’s profit/loss is greater than or equal to 10% of the absolute amount of combined operating profits of all segments that had profit or combined losses of all segments that had losses.
3. 10% Asset test:The segment’s assets are greater than or equal to 10% of the company’s identifiable assets.

Question 2

types of entities are required to report on business segments

Answer 2

Only publicly held companies are required to report certain key information about key segments of their business.