Ch. 32 - Operating Segments

Question 1

An operating segment is a component of an entity:

Answer 1

1. that engages in business activities from which it may earn revenues and incur expenses;
2. whos operating results are reviewed by operating decision maker to make decisions about resource allocation and performance; and
3. for which discrete financial information is available

Question 2

Reportable Segments disclosure requirements:

Answer 2

required to be disclosed separately in the FS

Question 3

Reportable Segments - Quantitative Thresholds

Answer 3

1. revenue is 10% of revenue from all operating segments
2. The reported profit / loss is 10% of the total profit/loss for the entity
3. the assets are over 10% of the combined assets of all segments

Question 4

similarities to aggregate operating segments

Answer 4

1. nature of products and services
2. nature of production process
3. type or class of customer for their products/services
4. the methods used to distribute their goods/service
5. the nature of the regulatory environment

Question 5

Disclosure for each operating segment

Answer 5

1. profit or loss
2. assets and liabilities
3. other key items the decision maker regularly uses