Segment Reporting

Question 1

business segment is classified as a a reportable segment if it has

Answer 1

least 10% of the total for all segments of one or more of the following:

• Revenues
• Assets
• Profits

Question 2

Disclosure of segment information is required if

Answer 2

10% or more of total revenues are derived from sales to a single customer or if 10% or more of total revenues are derived from foreign operations

Question 3

what counts as revenue

Answer 3

sales made to unaffiliated customers and to other segments.

Revenue does not include interest, which is a form of other income, or gains or losses on discontinued operations.

Question 4

required to report segment information

Answer 4

publicly traded companies

Question 5

The method for determining what segments are part of an entity is referred to as

Answer 5

Management approach

This is because segments are identified as those activities involving revenues and expenses that are evaluated by management. As a result, management may decide to identify segments by type of activity, such as manufacturing and sales; product, such as clothing and accessories; geographical location; or some other criteria.

Question 6

which item not used to determine revenue for reportable segment?

Answer 6

Gain or loss on discontinued operations
General corporate expense
Income tax expense
interest earned