Question

Which of the following would be the exceptions to the guidelines to determine that a segment is reportable in accordance with AASB 8? A) If management judges that operating segments identified as a reportable segment in previous periods, but no longer do so in the current period, is of continuing importance to be reported separately and vice-versa B) Operating segments that do not meet any of the quantitative thresholds, but management believes that information about the segment would be useful to users of the financial statements C) BothAandB D) None of the above

Answer 1

As per AASB following threshold for reporting segment have been given Para 13:-

An entity shall report separately information about an operating segment that meets any of the following quantitative thresholds: (a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are 10 per cent or more of the combined assets of all operating segments.

However, Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if management believes that information about the segment would be useful to users of the financial statements.

Also If management judges that an operating segment identified as a reportable segment in the immediately preceding period is of continuing significance, information about that segment shall continue to be reported separately in the current period even if it no longer meets the criteria for reportability in paragraph 13.

The option (a) in the given question which speaks about the "operating segments identified as a reportable segment in previous periods" is not exception as the AASB 8 clearly mentions that it is applicable if it was reported in the "immediately previous period" and not all previous periods.

Option B is covered in the exception.

Hence, right answer would be "B"

Operating segments that do not meet any of the quantitative thresholds, but management believes that information about the segment would be useful to users of the financial statements.