#58 Segment Reporting

Question 1

What are the three Quantitative tests for determining reportable operating segments?

Answer 1

A. The operating segment’s revenue from all sources (internal & external) is 10% or more of the combined revenues of all of the company’s operating segments

B. The operating segment’s identifiable assets are 10% or more of the combined assets of all operating segments.

C. The operating segment’s profit or loss is 10% or more of the greater of:

1. The combined operating profit of all operating segments that did not report a loss
2. The combined loss of all operating segments that did report an operating loss

Question 2

What is the 75% rule regarding segment reporting?

Answer 2

The total external revenue reported by reportable segments must be at least 75% of the company’s total consolidated revenue