7456 Operating Segment & Interim Reporting Flashcards
(12 cards)
An entity identified the following segments for the current year:
Segment Revenue Profit 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 4,000,000 575,000 5,500,000
F 2,000,000 525,000 3,000,000
I. Segment revenue includes sales to customers and intersegment sales.
II. The reportable segments are A, B, C, D and E.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
Revenue test
33M*10%=3.3M
Profit test
6M*10%=600k
Asset test
66M*10%=6.6M
An entity reported the following segment profit or loss for the current year:
Segment 1 7,000,000 profit
Segment 2 3,000,000 profit
Segment 3 4,000,000 loss
Segment 4 1,000,000 profit
Segment 5 500,000 loss
I. A segment is reportable if the segment profit or loss is 10% or more of the greater between the combined profit of profitable segments and combined loss of unprofitable segments.
II. The reportable segments are 1, 2 and 3.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
Profit 11M //
Loss 4.5M XX
Choose 11M, greater
*10% = 1.1M
An entity reported revenue of P50,000,000, excluding intersegment sales of P10,000,000, expenses of P47,000,000 and net income of P3,000,000 for the current year. Expenses included payroll costs of P15,000,000. The combined assets of all segments totaled P45,000,000.
I. A major customer should report at least revenue of P5,000,000.
II. The reportable segments should report at least a total external revenue of P37,500,000.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true.
A. Statements I and II are true
I. 50M10%=5M
II. 50M75%=37,500,000
An entity operates in the travel industry and incurs costs evenly throughout the year. Advertising cost of P2,000,000 was incurred on March 1, 2025, and staff bonuses are paid at year-end based on sales.
Staff bonuses are expected to be around P20,000,000 for 2025. The staff bonuses are allocated uniformly over four quarters of 2025.
I. IFRS does not mandate which entities are required to publish interim financial reports, how frequently or how soon after the end of an interim period.
II. Expenses which clearly benefit more than one interim period should be allocated to the interim periods benefited.
III. The entity should report total expenses of P7,000,000 for the quarter ending March 31, 2025.
A. All statements are true
B. All statements are not true
C. Only two statements are true
D. Only one statement is true
A. All statements are true
Bonus 20M/4 = 5M
Advert 2M
An entity reported P950,000 net income for the quarter ended September 30, 2025 which included the following after-tax items:
A P600,000 expropriation gain realized in May 2025 was allocated equally to the second, third and fourth quarters of 2025.
A P150,000 cumulative effect loss resulting from a change in inventory valuation method was recognized on August 31, 2025.
In addition, the entity paid P480,000 on February 1, 2025, for 2025 calendar-year real property tax. Of this amount, P120,000 was allocated to the third quarter of 2025.
I. Any gain or loss on derecognition of property, plant and equipment shall not be allocated over the interim periods.
II. The net income for the quarter ending September 30, 2025 should be reported at P900,000
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
all 600k recognized at 2nd quarter. wa nai 3rd and 4th. Minusan 200k sa 3rd
adjustment is retro to the RE, beg. Not e adjust sa NI. So add back the loss
RPT would benefit the whole yr. Tama lang na mag allocate.
NI, unadj 950k
Expro gain (200k)
Cum Loss 150k
NI, adj 900k
An entity prepares quarterly interim financial reports. The entity sells electrical goods and normally 5% of customers claim on their warranty. The provision in the first quarter was calculated at 5% of sales to date which amounted to P10,000,000.
However, in the second quarter, a design fault was found and warranty claims were expected to be 10% for the whole year. Sales for the second quarter amounted to P15,000,000.
I. The warranty expense should be reported in the interim income statement for the first quarter at P500,000.
II. The warranty expense should be reported in the interim income statement for the second quarter at P2,500,000.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
C. Only statement I is true
I. 10M*5%=500k
II.
2nd Q 10%(10M sales + 15M sales) 2.5M
1st Q 5%(10M) (500k)
Warranty Exp 2nd Q 2M
Which quantitative threshold is not a requirement in qualifying a reportable segment?
A. The segment revenue, both external and internal, 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 profitable
segments and combined loss of unprofitable segments
C. The segment assets are 10% or more of the combined assets of all operating segments
D. The segment liabilities are 10% or more of the combined liabilities of all operating segments
D. The segment liabilities are 10% or more of the combined liabilities of all operating segments
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.
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 who reports to the board of directors usually plays a very important role and would generally qualify as chief operating decision maker
D. The chief internal auditor who reports to the board of directors usually plays a very important role and would generally qualify as chief operating decision maker
Which of the following statements about major customer disclosure is not true?
A. A major customer is defined as one providing revenue which amounts to 10% or more of the combined external revenue of all operating segments.
B. The identities of major customers must be disclosed.
C. The entity shall disclose the total amount of revenue from major customers.
D. The entity shall disclose the identity of the segment reporting the revenue from major customers.
B. The identities of major customers must be disclosed.
Interim financial report shall be published
A. Once a year at anytime during the year
B. Within a month of the half year-end
C. On a quarterly basis
D. Whenever the entity wishes because interim reports are not required
D. Whenever the entity wishes because interim reports are not required
If an entity does not prepare interim financial report
A. The year-end financial statements are deemed not to comply with IFRS.
B. The year-end financial statements’ compliance with IFRS is not affected.
C. The year-end financial statements shall not be acceptable under local jurisdiction.
D. Interim financial reports shall be included in the year-end financial statements
B. The year-end financial statements’ compliance with IFRS is not affected.
Which statement is true about interim reporting?
A. All entities that issue an annual report must issue an interim financial report.
B. Interim financial reporting should be viewed as reporting for a separate accounting period.
C. A complete set of financial statements must be presented for an interim period.
D. The same accounting principles used for the annual report should be employed for interim report.
D. The same accounting principles used for the annual report should be employed for interim report.
