Chapter 13

Operating segment

Problem 13-1
Timmy Company provided the following information in relation to revenue earned by
operating segments for the current year:

Sales to
Segment unaffiliated Intersegment sales Total revenue
customers
Alo 5,000 3,000 8,000
Bix 8,000 4,000 12,000
Cee 4,000 - 4,000
Dill 43,000 16,000 59,000
Combined 60,000 23,000 83,000
Elimination - (23,000) (23,000)
Consolidated 60,000 - 60,000

What total revenue should be disclosed by the reportable segments?

a. 60,000
b. 83,000
c. 71,000
d. 51,000
Answer:

Total revenue
Bix 12,000
Dill 59,000
71,000

Problem 13-2
Correy Company provided the following data relating to operating segments:
Industry revenue profit total assets
A 10,000,000 1,750,000 20,000,000
B 8,000,000 1,400,000 17,500,000
C 6,000,000 1,200,000 12,500,000
D 3,000,000 550,000 7,500,000
E 4,250,000 675,000 7,000,000
F 1,500,000 225,000 3,000,000

How many reportable segments does Correy have?

a. Three
b. Four
c. Five
d. Six

Answer:

Revenue Profit Assets

A 30.53% 30.17% 29.63%
B 24.43% 24.14% 25.93%
C 18.32% 20.69% 18.52%
D 9.16% 9.48% 11.11%
E 12.98% 11.64% 10.37%
F 4.58% 3.88% 4.44%
100.00% 100.00% 100.00%

A, B, C, D and E reportable because their revenue or operating profit or asset is at least

10% of the combined amount.

Problem 13-3
Aurora Company provided the following profit (loss) relating to operating segments:

V 3,400,000
W 1,000,000
X (2,000,000)
Y 400,000
Z ( 200,000)

What are the reportable segments based on profit or loss?

a. V, W, X and Y
b. V, W and X
c. V and W
d. V, W, X, Y and Z

Answer:

V 3,400,000
W 1,000,000
X 2,000,000
Y 400,000
Z 200,000
4,800,000 2,200,000
The total profit figure is the basis for identifying the reportable segments because it is
higher than the total loss figure. Accordingly, those segments with profit or loss of at
least 10% of P4,800,000 or P480,000 are reportable. Thus V, W and X are reportable

Problem 13-4

Macbeth Company, an entity listed on a recognized stock exchange, reports operating

results from a North American division to the chief operating decision maker.

The segment information for the current year is as follows:

Revenue 3,800,000
Profit 1,200,000
Assets 1,600,000
Number of employees 2,500

The entity’s result for all of the segments in total are:

Revenue 40,000,000
Profit 10,000,000
Assets 20,000,000
Number of employees 25,000

Which piece of information determines that the North American division is a reportable
segment?

a. Revenue
b. Profit
c. Assets
d. Number of employees

Answer:

1,200,000/10,000,000 12%

Problem 13-5
Aris Company provided the following information in relation to operating for the current
year:

Sales to unaffiliated customers 20,000,000

Intersegment sales of products similar to those sold
to unaffiliated customers 5,000,000
Interest earned on loans to other industry segments 1,000,000
The entity and all of its division are engaged solely in manufacturing operations.

Under the revenue test, what is the minimum revenue of a reportable segment?

a. 2,500,000
b. 2,600,000
c. 2,100,000
d. 2,000,000

Answer:

Sales to unaffiliated customers 20,000,000

Intersegment sales 5,000,000
Interest earned on loans 1,000,000
Total segment revenue 26,000,000

Revenue criterion (10% x 26,000,000) 2,600,000

Problem 13-6

Grum Company is subject to the requirements of segments reporting. In the income

statement for the current year, the intersegment sales of P10,000,000, expenses of
P47,000,000 and net income of P3,000,000. Expenses included payroll costs of
P15,000,000.

The combined total assets of all operating segments at year-end amounted to

P45,000,000.

1. What is the minimum amount of sales to a major customer?

a. 5,000,000
b. 4,000,000
c. 6,000,000
d. 4,500,000

Answer:

10% x 45,000,000 4,500,000

2. What is the minimum amount of external revenue to be disclosed by reportable

segments?

a. 22,500,000
b. 30,000,000
 c. 33,750,000
d. 37,500,000

Answer:

75% x 45,000,000 33,750,000

Problem 13-7
Graf Company discloses supplemental operating segment information. The following
information is available for the current year:

Segment Sales Traceable expenses

X 5,000,000 3,000,000
Y 4,000,000 2,500,000
Z 3,000,000 1,500,000

Additional expenses

Indirect segment expenses 1,800,000

General corporate expenses 1,200,000
Interest expense 600,000
Income tax expense 400,000

The interest expense and income tax expense are regularly reviewed by the chief
operating decision maker as a measure of profit or loss.

Appropriate common expenses are allocated to segments based on the ratio of a

segment’s sales to total sales.

What is Segment Z’s operating profit?

a. 900,000
b. 950,000
c. 800,000
d. 500,000

Answer:

Sales 3,000,000
Traceable expenses (1,500,000)
Indirect expenses (25% x 1,800,000) ( 450,000)
General Corporate expenses (25% x 1,200,000) ( 300,000)
Interest expense (25% x 600,000) ( 150,000)
Income tax expense (25% x 400,000) ( 100,000)
500,000
Problem 13-8

Clay Company has three lines of business, each of which was determined to be
reportable segment. Sales aggregated P7,500,000 in the current year, of which
Segment One contributed 40%.

Traceable costs were P1,750,000 for Segment One out of a total of P5,000,000 for the
entity as a whole.

The entity allocates common costs of P1,500,000 based on the ratio of a segment’s
income before common costs to the total income before common costs.

What amount should be reported as operating profit for Segment One?

a. 1,250,000
b. 1,000,000
c. 650,000
d. 500,000

Answer:

Segment 1 Total revenue

Sales 3,000,000 7,500,000
Traceable costs (1,750,000) (5,000,000)
Profit before common cost 1,250,000 2,500,000
Common cost (1,250,000/2,500,000 x1,500,000) ( 750,000) (1,500,000)
Segment profit 500,000 1,000,000

Problem 13-9

Hyde Company has three reportable segments. Common costs are appropriately
allocated on the basis of sales.

In the current year, Segment A had sales of P3,000,000, which was 25% of Hyde’s total
sales, and had traceable costs of P1,900,000.

In the current year, the entity incurred segment costs of P500,000 that were not directly
traceable to any of the divisions.

Segment A incurred interest expense of P300,000 in the current year. Interest expense
is included in the measure of profit or loss.

What amount should be reported as Segment A’s profit for the current year?
a. 875,000
b. 900,000
c. 975,000
d. 675,000

Answer:

Sales – Segment A 3,000,000

Expenses:
Traceable cost 1,900,000
Allocated indirect cost (25% x 500,000) 125,000
Interest expense 300,000 2,325,000
Segment profit 675,000

Problem 13-10

Eagle Company operates in several different industries. Total sales for the entity totaled
P14,000,000, and total common costs amounted to P6,500,000 for the current year.

For internal reporting purposes, the entity allocates common costs based on the ratio of
a segment’s sales to total sales.

Segment Contribution to total sales Costs specific to the segment

1 25% 1,100,000
2 12% 1,000,000
3 31% 1,300,000
4 23% 880,000
5 9% 400,000

What is the operating profit of Segment 1?

a. 3,500,000
b. 1,875,000
c. 2,400,000
d. 775,000

Answer:

Sales – Segment 1 (25% x 14,000,000) 3,500,000

Specific cost – Segment 1 (1,100,000)
Allocated common costs (25% x 6,500,000) (1,625,000)
Operating profit 775,000
Problem 13-11

Colt Company has four manufacturing divisions, each of which has been determined to
be a reportable segment. Common costs are appropriately allocated on the basis of
each division’s sales in relation to Colt’s aggregate sales. Colt’s Delta division
accounted for 40% of Colt’s total sales in the current year.

For the current year, Delta division had sales of P8,000,000 and traceable costs of
P4,800,000. In addition, the Delta division incurred interest expense of P640,000. In the
current year, Colt incurred costs of P800,000 that were not directly traceable to any of
the divisions.

It is an entity policy that interest expense is included in the measure of profit or loss that
is reviewed by the chief operating decision maker.

What amount should be disclosed as Delta’s profit for the current year?

a. 3,200,000
b. 3,000,000
c. 2,880,000
d. 2,240,000

Answer:

Sales – Delta’s 8,000,000

Traceable costs (4,800,000)
Interest expense ( 640,000)
Incurred cost (40% x 800,000) ( 320,000)
Profit 2,240,000

Problem 13-12

Taylor Company assesses performance and makes operating decisions using the
following information for the reportable segments:

Total revenue 9,000,000

Total profit or loss 1,500,000

The total profit and loss included intersegment profit of P300,000. In addition, the entity
had P100,000 of common costs for the reportable segments that are not allocated in
reports provided to the chief operating decision maker.

For purposes of segment reporting, what amount should be reported as segment profit?
a. 1,400,000
b. 1,200,000
c. 1,800,000
d. 1,500,000

Answer:

Total profit or loss 1,500,000

Common cost ( 100,000)
Segment profit 1,400,000

Problem 13-13

Diversity Company had total assets of P65,000,000 at year-end and provided the
following condensed income statement for the current year:

Sales 45,000,000
Expenses (33,000,000)
Income before income tax 12,000,000
Income tax expense ( 3,800,000)
Net income 8,200,000

The entity has two reportable segments and has developed the following related
information:

Segment A Segment B Others

Sales 25,000,000 15,000,000 5,000,000

Segment expenses 18,000,000 9,000,000 4,000,000
Segment assets 35,000,000 18,000,000 7,000,000

The total assets of P65,000,000 include general corporate assets of P5,000,000.

The total segment expenses of P33,000,000 include general corporate expenses of

P2,000,000.

The chief operating decision maker does not allocate income tax as a measure of profit
or loss.

Required:

1. Prepare the necessary disclosures for Diversity Company in relation to operating

segments.
2. Prepare the reconciliations between segment information and amount shown in the
entity’s financial statements.
 Answer:

Disclosure of profit or loss and assets

Segment A Segment B Others Total

Sales 25,000,000 15,000,000 5,000,000 45,000,000

Profit or loss 7,000,000 6,000,000 1,000,000 14,000,000
Total assets 35,000,000 18,000,000 7,000,000 60,000,000

Reconciliation

Revenue

Revenue of reportable segments 40,000,000

Revenue of nonreportable segments 5,000,000
Entity revenue shown in income statement 45,000,000

Profit and loss

Profit or loss of reportable segments 13,000,000

Profit or loss of nonreportable segments 1,000,000
Corporate expenses ( 2,000,000)
Unallocated income tax expense ( 3,800,000)
Entity net income shown in income statement 8,200,000

Total assets

Total assets of reportable segments 53,000,000

Total assets of nonreportable segments 7,000,000
General corporate assets 5,000,000
Entity total assets shown in statement of financial position 65,000,000

Problem 13-14
Congo Company does business in several different industries. The condensed income
statement for the entire entity for the current year is as follows:

Sales 60,000,000
Costs of goods sold (28,000,000)
Gross income 32,000,000
Expenses (14,000,000)
Depreciation ( 4,000,000)
Income tax expense ( 4,000,000)
Net income 10,000,000
The entity has two major reportable segments, X and Y. an analysis reveals that
P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are
related to general corporate activities.

The chief operating decision maker allocates income tax expense to reportable
segments as a measure of profit or loss.

The expenses and sales are directly allocable to segment activities according to the
following percentages:

Segment X Segment Y Others

Sales 40% 45% 15%

Costs of goods sold 35 50 15
Expenses 40 40 20
Depreciation 40 45 15
Income tax expense 50 40 10

Required:

1. Prepare a schedule that reports the segment profit or loss.

2. Prepare the disclosures required for operating segments.
3. Prepare the reconciliations between segment information and amounts shown in the
entity’s financial statements.

Answer:

Segment X Segment Y Others Total

Sales 24,000 27,000 9,000 60,000
Cost of goods sold ( 9,800) (14,000) (4,200) (28,000)
Gross income 14,200 13,000 4,800 32,000
Segment expenses ( 4,800) ( 4,800) (2,400) (12,000)
Depreciation ( 1,200) ( 1,350) ( 450) ( 3,000)
Income tax expense ( 2,000) ( 1,600) ( 400) ( 4,000)
Segment profit or loss 6,200 5,250 1,550 13,000

Disclosure of segment profit or loss

Segment X Segment Y Others Total

Sales 24,000 27,000 9,000 60,000
Profit or loss 6,200 5,250 1,550 13,000
Depreciation 1,200 1,350 450 3,000
Reconciliation

Revenue

Revenue of reportable segments 51,000,000

Revenue of nonreportable segments 9,000,000
Entity revenue shown in income statement 60,000,000

Profit and loss

Profit or loss of reportable segments 11,450,000

Profit or loss of nonreportable segments 1,550,000
Unallocated depreciation ( 1,000,000)
General corporate expenses ( 2,000,000)
Entity net income shown in income statement 10,000,000

Problem 13-15

Easy Company provided the following statement of financial position at year-end and
income statement for the current year:

Current assets 130,000

Property, plant and equipment 500,000
Goodwill 100,000
Investment in associate 70,000

Total assets 800,000

Current liabilities 90,000

Noncurrent liabilities 60,000
Share capital 400,000
Retained earnings 250,000

Total liabilities and equity 800,000

Revenue 1,800,000
Cost of goods sold (1,200,000)

Gross profit 600,000

Other income 60,000
Distribution cost ( 200,000)
Administrative expenses ( 100,000)
Other expenses ( 50,000)
Finance cost ( 60,000)
Share in profit of associate 10,000
Income before tax 260,000
Income tax expense ( 90,000)

Net income 170,000

 The entity is organized for management purposes into three major operating
segments, namely furniture, stationery and computer products. There are other
smaller operating segments.

External sales Intersegment sales

Furniture 800,000 200,000

Stationery 500,000 150,000
Computer products 400,000 50,000
Other segments 100,000

 The costs of goods sold, distribution cost, administrative expenses and finance cost
can be allocated as 50% to furniture, 25% to stationery, 20% to computer products,
and 5% to other segments.
 The cost of sales related to intersegment sales amounted to P24,000,000 to be
allocated as 50% to furniture, 40% to stationery, and 10% to computer products
 The segment assets and liabilities are as follows:

Furniture Stationery Computer products others

Current
Asset 80,000 40,000 5,000 2,000
Property,
Plant and
Equipment 300,000 100,000 85,000 3,000
Goodwill 60,000 30,000 10,000 -

Total asset 440,000 170,000 100,000 5,000

Current
Liabilities 45,000 30,000 8,000 1,000
Noncurrent
Liabilities 30,000 20,000 7,000 2,000

Total liabilities 75,000 50,000 15,000 3,000

The remaining assets and liabilities are general corporate assets and liabilities are
general corporate assets and liabilities identified with the entity as a whole.
 The other income and other expenses are not allocated to the operating segments
as a measure of profit or loss.
 The chief operating decision maker does not allocate income tax expense to
reportable segments as a measure of profit or loss.

Required:

1. Determine the profit or loss for all the operating segments.

2. Prepare the disclosure required for operating segments.
3. Prepare the necessary reconciliations between the segment information and
amounts shown in the entity’s financial statements.

Answer:

Segment profit or loss

Furniture Stationery Computer Others Total

External 800,000 500,000 400,000 100,000 1,800,000

sales
Intersegment 200,000 150,000 50,000 - 400,000
sales
Total revenue 1,000,000 650,000 450,000 100,000 2,200,000
Cost of sales (600,000) (300,000) (240,000) (60,000) (1,200,000)
– external
Cost of sales (120,000) (96,000) (24,000) - (240,000)
– internal
Gross profit 280,000 254,000 186,000 40,000 760,000
Distribution (100,000) (50,000) (40,000) (10,000) (200,000)
cost
Administrativ (50,000) (25,000) (20,000) (5,000) (100,000)
e expense
Finance cost (30,000) (15,000) (12,000) (3,000) (60,000)
Segment 100,000 164,000 114,000 22,000 400,000
profit or loss

Minimum disclosures

Furniture Stationery Computer Others Total

External 800,000 500,000 400,000 100,000 1,800,000

sales
Intersegmen 200,000 150,000 50,000 - 400,000
t sales
Profit or loss 100,000 164,000 114,000 22,000 400,000
Finance cost 30,000 15,000 12,000 3,000 60,000
Total assets 440,000 170,000 100,000 5,000 715,000
Total 75,000 50,000 15,000 3,000 143,000
liabilities

Reconciliation

Revenue

Sales of reportable segments 2,100,000

Sales of nonreportable segments 100,000
Elimination of intersegment sales ( 400,000)
Entity sale in income statement 1,800,000

Profit and loss

Profit or loss of reportable segments 378,000

Profit or loss of nonreportable segments 22,000
Elimination of intersegment profit (160,000)
Share in profit of associate 10,000
Unallocated items:
Other income 60,000
Other expenses (50,000)
Income tax expense (90,000)
Entity net income in income statement 170,000

Intersegment sales 400,000

Cost of sales – intersegment sales (240,000)
Intersegment gross profit 160,000

Total assets

Total assets of reportable segments 710,000

Total assets of nonreportable segments 5,000
Investment in associate 70,000
General corporate assets 15,000
Entity total assets 800,000

Total liabilities

Total liabilities of reportable segments 140,000

Total liabilities of nonreportable segments 3,000
General corporate liabilities 7,000
Entity total liabilities 150,000
Problem 13-16

Revlon Company provided the following data for the current year.

Segments Revenue Profit (loss) Assets

1 620,000 200,000 400,000

2 100,000 20,000 80,000
3 340,000 70,000 300,000
4 190,000 ( 30,000) 140,000
5 180,000 ( 25,000) 180,000
6 70,000 10,000 120,000
7 120,000 ( 20,000) 140,000
Others 380,000 ( 25,000) 140,000

 The “others category includes five operating segments, none of which has revenue
or assets greater than P80,000 and none with an operating profit.
 Operating Segments 1 and 2 produce very similar products and use very similar
production processes, but serve different customer types and use quite different
product distribution system. These differences are due in part to the fact that
Segment 2 operates in a regulated environment while Segment 1 does not.
 Operating Segments 6 and 7 have similar products, production processes, product
distribution systems, but are organized as separate division since they serve
substantially different types of customers. Neither Segments 6 and 7 operate in a
regulated environment.

Required:

1. Determine the reportable segments without regard to aggregation criteria.

2. If the 75% overall size test for reportable segments is not yet met, identify additional
reportable segments.
3. What are the reportable segments after considering all factors?

Answer:

Segments Revenue Profit (loss) Assets

1 620,000 200,000 400,000

2 100,000 20,000 80,000
3 340,000 70,000 300,000
4 190,000 ( 30,000) 140,000
5 180,000 ( 25,000) 180,000
6 70,000 10,000 120,000
7 120,000 ( 20,000) 140,000
Others 380,000 ( 25,000) 140,000
 Total 2,000,000 200,000 1,500,000
1. The information above shows that any operating segment with revenue equal to
or greater than P200,000 is a reportable segment (segments 1 and 3). Any
segment with identifiable assets greater than P150,000 is a reportable segments
1, 3, and 5). The total profit for all segments with profit totals P300,000. As a
result, any segment with an operating profit or loss equal to or greater than an
absolute amount of P30,000 is a reportable segment (segments 1, 3 and 4).
Thus, Segments 1, 3, 4 and 5 are reportable segments.

2. The revenue of the reportable segment

Segment 1 620,000
3 340,000
4 190,000
5 180,000
Total revenue 1,330,000

Percentage (1,330,000 / 2,000,000)

If the total external revenue attributable to reportable segments constitutes less

than 75% of the total entity revenue, additional segment shall be identified even if
they do not meet the 10%, threshold segments that are below the 10% threshold
can be aggregated as one segment if they share a majority of the five factors in
identifying a business segment, namely:

a. Nature of product
b. Nature of production process
c. Class of customer
d. Method of distributing product
e. Regulated environment

Since segments 6 and 7 are similar in four of the five criteria, they can be
aggregated as one reportable segment.

Segment 6 Segment & Total

Revenue 70,000 120,000 190,000
Profit (loss) 10,000 ( 20,000) ( 10,000)
Segment assets 120,000 140,000 260,000

With segments 6 and 7 considered as one reportable segment, the total segment
revenue increases to P1,520,000 or 76% of the total. The 75% requirement has
been met.

Revenue of reportable segments before aggregation 1,330,000

Revenue of additional reportable segments 190,000
Total 1,520,000
 Percentage (1,520,000 / 2,000,000) 76%

3. In conclusion, Segments 1, 3, 4, 5, and Segments 6 and 7 (combined) shall be

considered reportable segments.

Problem 13-17

Universal Company has two different product lines and makes significant sales both in
the Philippines and Japan.

The entity has compiled the following information

Product A Product B
Philippines Japan Philippines Japan

Revenue 1,000,000 1,500,000 4,000,000 2,000,000

Segment profit or loss 250,000 400,000 500,000 200,000
Depreciation 150,000 200,000 800,000 500,000
Property, plant and
Equipment 500,000 600,000 2,500,000 1,500,000
Segment assets 1,200,000 1,400,000 6,000,000 4,000,000
Segment liabilities 700,000 600,000 4,000,000 2,000,000
Capital expenditures 200,000 400,000 1,000,000 300,000

Required:

1. Universal Company has structured its operations internally into two division based
on two products, A and B

Prepare the disclosures required in relation to operating segments.

2. Prepare the entity-wide disclosure about geographical areas to conform with the
requirement of segment reporting.
 Answer:

1. Minimum disclosures under PFRS:

Product A Product B Total

Revenue 2,500,000 6,000,000 8,500,000
Segment profit or loss 650,000 700,000 1,350,000
Depreciation 350,000 1,300,000 1,650,000
Total assets 2,600,000 10,000,000 12,600,000
Total liabilities 1,300,000 6,000,000 7,300,000
Capital expenditures 600,000 1,300,000 1,900,000

2. Entity-wide disclosure about geographical areas:

Philippines Japan Total

Revenue 5,000,000 3,500,000 8,500,000
Noncurrent assets - PPE 3,000,000 2,100,000 5,100,000

Problem 13-18

1. If a financial report contains both the consolidated financial statements of a parent

and the parent’s separate financial statements, segment information is required in

a. The separate financial statements

b. The consolidated financial statements
c. Both the separate and consolidated financial statements.
d. Neither the separate nor the consolidated financial statements

2. When an operating segment is reportable?

a. The segment external and internal revenue is 10% or more of the combined
external and internal revenue of all operating segments
b. The segment profit or loss is 10% or more of the greater between the
combined profit of all profitable operating segments and the combined loss
of all unprofitable operating segments
c. The assets of the segment are 10% or more of the total assets of all operating
segments
d. Under all of these circumstances.

3. In financial reporting for operating segments, and entity shall disclose all of the
following, except

a. Types of products and services from which each reportable segment derives
revenue
 b. The title of the chief operating decision maker of each reportable segment.
c. Factors used to identify the reportable segments.
d. The basis of measurement of segment profit or loss and segment assets.

4. Which statement is not true with respect to a chief operating decision maker?

a. The term chief operating decision maker identifies a function and not necessarily
a manager with specific title.
b. In some cases, the chief operating decision maker could be the chief operating
officer.
c. The board of directors acting collectively could qualify as the chief operating
decision maker.
d. The chief internal auditor would generally qualify as chief operating
decision maker.

5. What is the quantitative threshold for the revenue that must be disclosed by
reportable operating segments?

a. The total external and internal revenue of all reportable segments is 75% or more
of the entity external revenue.
b. The total external revenue of all reportable segments is 75% or more of entity
external and internal revenue.
c. The total external revenue of all reportable segments is 75% or more of the
entity external revenue.
d. The total internal revenue of all reportable segments is 75% or more of the entity
internal revenue.

6. Two or more operating segments may be aggregated into a single operating

segment if all of the following conditions are satisfied, except

a. The segments have similar characteristics.

b. The segments share a majority of the nature of product or service, nature of
production process, class of customer, method of product distribution and
regulatory environment.
c. The aggregation is consistent with the core principles of segment reporting.
d. The segments have dissimilar characteristics.

7. Operating segments that do not meet any of the quantitative thresholds

a. Cannot be considered reportable.

b. May be considered reportable and separately disclosed if management
believes that information about the segment would be useful to the users
of the financial statements.
c. May be considered reportable and separately disclosed if the information is for
internal use.
 d. May be considered reportable and separately disclosed if this is the practice
within the economic environment in which the entity operates

8. Which of the following is a required enterprise-wide disclosure regarding external

customers?

a. The entity of any external customer considered to be major by management

b. The identity of any external customer providing 10% or more of a particular
operating segment revenue
c. Information on major customers is not required in segment reporting
d. The fact that transactions with a particular external customer constitute at
least 10% of the total entity revenue

9. IFRS 8 requires that an entity should provide reconciliations of segment information.

Which of following is not a required reconciliation?

a. The total of the reportable segments’ revenue to the entity’s revenue

b. The total of the reportable segments’ profit or loss to the entity’s profit or loss
before tax expense and discontinued operating
c. The total number of major customers of all segments to the total number of
major customers of the entity
d. The total of the reportable segments’ assets to the entity’s assets

10. An operating segment is considered reportable when any of the following conditions
is met, except

a. Segment revenue is 10% or more of the combined revenue of all of the entity’s
segments.
b. Segment assets are 10% or more of the combined assets of all segments.
c. Segment liabilities are 10% or more of the combined liabilities of all
segments.
d. Segment’s operating profit or operating loss is 10% or more of the combined
operating profit of all segments that did not incur an operating loss.