Question 1

It is possible to classify segments in different ways.Some that have been suggested are listed below.
Ibusiness segments
IIoperating segments
IIIgeographic segments
IVreportable segments
Vsignificant segments
The definitions in Appendix A of AASB 8 includes ones for:

A)I and III
B)II and V
C)II
D)II and IV

Accepted Answer

Under AASB 8, segments can be classified as operating segments (II) and reportable segments (IV).

Question 2

A segment that was identified as a reportable segment in the prior reporting period it is usually classified as a reportable segment in the current reporting period.

Accepted Answer

Once a segment is identified as reportable in a prior period, it usually remains reportable in the current period unless there has been a significant change in its operations or financial performance. This is in accordance with accounting standards such as IFRS and GAAP.

Question 3

Under AASB 8:&#10;A)disclosure is required of both reportable operating segments and geographic segments&#10;B)disclosure is required of reportable operating segments and neither requires nor prohibits the disclosure of geographic segments&#10;C)disclosure is required of reportable operating segments and disclosure of geographic segments is prohibited&#10;D)disclosure is required of reportable operating segments and disclosure of geographic segments is only required if they are significant

Accepted Answer

AASB 8 requires the disclosure of reportable operating segments and does not mandate nor prohibit the disclosure of geographic segments, leaving it to the discretion of the entity based on the relevance and significance of such information to the users of its financial statements.

Question 4

It is possible to classify segments in different ways.Some that have been suggested are listed below.
Ibusiness segments
IIoperating segments
IIIgeographic segments
IVreportable segments
Vsignificant segments
The definitions in Appendix A of AASB 8 includes ones for:

A)I and III
B)II and V
C)II
D)II and IV

Accepted Answer

The answer of It is possible to classify segments in...

Question 5

Under AASB 8 we must always report the amount of segment net assets - the difference between segment assets and segment liabilities

Accepted Answer

AASB 8 does not mandate the disclosure of segment net assets; it requires the disclosure of segment revenues, segment results, and certain other information, but not specifically the net assets of each segment.

Question 6

Under AASB 8 different rules are adopted in determining segment revenue and segment expenses

Accepted Answer

The answer of Under AASB 8 different rules are adopted...

Question 7

Which of the following is not listed in AASB 8 as a factor to be considered when combining reportable segments?&#10;A)the country in which the segments are located&#10;B)the nature of the production processes&#10;C)the type or class of customer for their products and services&#10;D)the nature of the products and services

Accepted Answer

AASB 8 lists the nature of the production processes, type or class of customer for their products and services, and the nature of the products and services as factors to be considered when combining reportable segments. The country in which the segments are located is not listed as a factor.

Question 8

Under AASB 8 segment profit is the difference between:&#10;A)revenues from ordinary activities and expenses from ordinary activities&#10;B)revenues from operating activities and expenses from ordinary activities&#10;C)revenues and expenses internally reported to senior management&#10;D)revenues for the segment that corresponds to those reported in the comprehensive profit statement (same recognition and measurement rules applied)

Accepted Answer

Segment profit under AASB 8 is defined as the difference between revenues and expenses that are internally reported to the organization's chief operating decision maker for the purposes of making decisions about allocating resources to the segment and assessing its performance. This approach allows for flexibility in how segments are reported, reflecting the internal financial reporting structure of the entity.

Question 9

Under AASB 8 the following factors are relevant to deciding if a segment is a reportable segment:
Ithe majority of segment revenues arise from external transactions
I Isegment sales revenue to external customers and other segments is 10% or more of total segment revenue for all segments
IIIabsolute amount of segment profit is more than 10% of the greater of (a) the aggregate segment profit for all segments with a negative segment profit (segment loss) and (b) the aggregate segment profit for all segments with a positive segment profit
IVthe segment's assets are more than 10% of total assets for all segments
A segment is a reportable segment if the following tests are satisfied:

A)II and III only
B)I and at least one of II, III and IV
C)any one of II, III and IV
D)one only of I, II, III and IV

Accepted Answer

A segment becomes reportable under AASB 8 if it satisfies any one of the quantitative thresholds mentioned in options II, III, and IV, without the necessity for the majority of its revenues to come from external transactions as stated in option I.

Question 10

Under AASB 8 the objective is to provide disclosures:&#10;A)about reportable operating segments&#10;B)about material operating segments&#10;C)that enable users of financial statements to evaluate the nature and financial effects of the business activities in which an entity engages and the economic environments in which it operates&#10;D)about operating segments that satisfy the quantitative guidelines in AASB 8.13.

Accepted Answer

AASB 8 requires disclosures that enable users of financial statements to evaluate the nature and financial effects of the business activities in which an entity engages and the economic environments in which it operates. It does not differentiate between reportable or material operating segments and also does not limit disclosures to only those that satisfy quantitative guidelines.

Question 11

Which of the following statements most accurately reflects the position of AASB 8?&#10;A)for a segment, interest expense must never be reported&#10;B)for a segment, interest expense is only reported to the extent that it is reported internally&#10;C)for a segment, interest expense must always be reported&#10;D)for a segment, interest expense can only be reported if the associated liabilities are also reported

Accepted Answer

The answer of Which of the following statements most accurately...

Question 12

Under AASB 8 information must always be included in an entity's financial report about its reportable operating segments.

Accepted Answer

The answer of Under AASB 8 information must always be...

Question 13

In preparing segment information, different accounting policies can be adopted to those used in preparing the financial statements.

Accepted Answer

The answer of In preparing segment information, different accounting policies...

Question 14

Under AASB 8 income tax expense:&#10;A)is never reported for operating segments&#10;B)is only reported to the extent that it is reported internally to senior management&#10;C)is only reported for those operating segments that are legal entities&#10;D)must always be reported

Accepted Answer

The answer of Under AASB 8 income tax expense:&#10;A)is never...

Question 15

Gains on the sale of investments only form part of segment revenue if:&#10;A)the segment is involved in the development and sale of houses and apartments&#10;B)they are internally reported to senior management as part of segment profit or loss&#10;C)he segment is involved in activities primarily of a financial nature&#10;D)and only if they relate to investments in associates

Accepted Answer

The answer of Gains on the sale of investments only...

Deck 27: Segment Reporting