1501/110.

309 CP 1
MAN/ALB
Distance/Internal

Question 7 – Segment reporting

Sports Limited has 4 operating divisions: Bowls, Cricket, Rugby and Tennis. The Board
receives financial reports for each division. Financial information for the most recent year is
as follows:

Bowls Cricket Rugby Tennis Totals Eliminations Group

Total sales 90 200 300 50 640 150 490
External sales 90 110 240 50 490 490
Assets 200 60 200 50 510 70 440
Pre-tax profit (loss) 50 (5) 110 (15) 140 40 100

The “Eliminations” column reflects 150 sales by Cricket and Rugby to the other divisions, 30
of receivables from the other divisions owing to Cricket and Rugby at year end, and 40 of
unrealised inventory profits from these sales.

Required:

Establish, presenting all calculations, which segments must be reported separately in

accordance with NZ IFRS 8.
[Total: 5 marks]

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 110.309 2015 Examination solutions

Question 7 Segment reporting

Any segment with at least 10% of the total sales of all segments (i.e. 64 or more): Bowls,
Cricket, Rugby. [1] Any segment where absolute profit or loss is at least 10% of the greater
of the total for all segments in profit and all segments in loss (i.e. at least 10% of the greater
of 160 and 20, not 10% of 140): Bowls, Rugby. [1] Any segment with at least 10% of total
assets of all segments: Bowls, Cricket, Rugby. [1] This gives a provisional list: Bowls,
Cricket, Rugby. The external sales of these segments total 440, which is 90% of total
external sales (more than 75%). [1] So the reportable segments are Bowls, Cricket, Rugby.
[1]
Note: the information below the table explains the numbers in the table, but none of it affects
the segment computations.
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