Question 1

One of the advantages of AASB segment reporting is?

Accepted Answer

A)  all segments are reportable 
B)  provides full disclosure of the entity's activities 
C)  highlights the performance of the different entity activities 
D)  increased rules based reporting 
A)  all segments are reportable 
B)  provides full disclosure of the entity's activities 
C)  highlights the performance of the different entity activities 
D)  increased rules based reporting

Question 2

Which of the following is not likely to be a 'chief operating decision maker' as referred to in AASB 8 Operating Segments?

Accepted Answer

A)  executive committee of the board 
B)  chief executive officer 
C)  chief operating officer 
D)  chief accountant 
A)  executive committee of the board 
B)  chief executive officer 
C)  chief operating officer 
D)  chief accountant

Question 3

An important argument for providing segmental information in the financial reports is:

Accepted Answer

A)  It is simpler and easier for users to follow. 
B)  Consolidated information is so aggregated that it may disguise poor performance and very good performance among segments of the entity. 
C)  The shareholders of the individual companies in the group can use the segment information to assess the performance of their company. 
D)  The segments of the entity will be taxed separately on their earnings. 
A)  It is simpler and easier for users to follow. 
B)  Consolidated information is so aggregated that it may disguise poor performance and very good performance among segments of the entity. 
C)  The shareholders of the individual companies in the group can use the segment information to assess the performance of their company. 
D)  The segments of the entity will be taxed separately on their earnings.

Question 4

The guidelines to determine that a segment is reportable in accordance with AASB 8 Operating Segments includes:

Accepted Answer

A)  The segment's assets are equal to or greater than 10 per cent of the entity's total assets. 
B)  The expenses of the segment that relate to external sales are equal to or greater than 10 per cent of total segment expenses. 
C)  The segment's assets are 10 per cent or more of the combined assets of all operating segments. 
D)  The expenses of the segment that relate to external and internal sales are equal to or greater than 10 per cent of total segment expenses. 
A)  The segment's assets are equal to or greater than 10 per cent of the entity's total assets. 
B)  The expenses of the segment that relate to external sales are equal to or greater than 10 per cent of total segment expenses. 
C)  The segment's assets are 10 per cent or more of the combined assets of all operating segments. 
D)  The expenses of the segment that relate to external and internal sales are equal to or greater than 10 per cent of total segment expenses.

Question 5

AASB 8 identifies a number of purposes for segment data.These include to:

Accepted Answer

A)  enhance understandability of the information. 
B)  achieve comparability with other entities. 
C)  provide relevant and reliable information to users about product/service-related risks and returns. 
D)  all of the given answers. 
A)  enhance understandability of the information. 
B)  achieve comparability with other entities. 
C)  provide relevant and reliable information to users about product/service-related risks and returns. 
D)  all of the given answers.

Question 6

In accordance with AASB 8 Operating Segments,which of the following statements is incorrect?

Accepted Answer

A)  If the total external revenue reported by operating segments constitutes less than 75 per cent of the entity's revenue, additional operating segments shall be identified as reportable segments until at least 75 per cent of the entity's revenue is included in reportable segments. 
B)  Operating segments that are not reportable are combined and disclosed as part of 'all other segments'. 
C)  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 a reportable segment. 
D)  Identification of operating segments in AASB 8 Operating Segments adopts a 'rules-based' approach, while its predecessor AASB 114 Segment Reporting adopted a 'principles-based' approach. 
A)  If the total external revenue reported by operating segments constitutes less than 75 per cent of the entity's revenue, additional operating segments shall be identified as reportable segments until at least 75 per cent of the entity's revenue is included in reportable segments. 
B)  Operating segments that are not reportable are combined and disclosed as part of 'all other segments'. 
C)  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 a reportable segment. 
D)  Identification of operating segments in AASB 8 Operating Segments adopts a 'rules-based' approach, while its predecessor AASB 114 Segment Reporting adopted a 'principles-based' approach.

Question 7

Discuss the specific financial information items that must be disclosed in relation to segment reporting.

Accepted Answer

Segment reporting requires the disclosur

Question 8

The guidelines to determine that a segment is reportable in accordance with AASB 8 Operating Segments includes:

Accepted Answer

A)  The segment's reported revenue, including 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 segment's 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)  The segment's assets are 10 per cent or more of the combined assets of all operating segments. 
D)  All of the given answers are correct. 
A)  The segment's reported revenue, including 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 segment's 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)  The segment's assets are 10 per cent or more of the combined assets of all operating segments. 
D)  All of the given answers are correct.

Question 9

Discuss the reasons for the release of IFRS 8.

Accepted Answer

The release of IFRS 8 was driven by seve

Question 10

Gandulf Ltd provides the following segment information: $\begin{array}{|l|r|}
\hline
&Segment~ result\
 & (\$ 000) \
\hline \text { Business segment: } & \
\hline \text { Industrial manufacturing } & 500 \
\hline \text { Project consulting } & 90 \
\hline \text { Mechanical engineering } & 700 \
\hline \text { Retailing } & 140 \
\hline \text { Agriculture } & 70 \
\hline \text { Total } & 1500 \
\hline \text { Geographical segment: } & \
\hline \text { Australia } & 1000 \
\hline \text { Pacific Islands } &340  \
\hline \text { US } & 160 \
\hline \text { Total} & 1500\
\hline
\end{array}$  Which of the segments are reportable applying only the segment asset test?

Accepted Answer

A)  business segments: industrial manufacturing, project consulting, mechanical engineering; geographical segments: Australia, US. 
B)  business segments: industrial manufacturing, mechanical engineering; geographical segments: Australia. 
C)  business segments: mechanical engineering; geographical segments: Australia. 
D)  business segments: industrial manufacturing, project consulting, mechanical engineering, retailing, agriculture; geographical segments: Australia, US. 
A)  business segments: industrial manufacturing, project consulting, mechanical engineering; geographical segments: Australia, US. 
B)  business segments: industrial manufacturing, mechanical engineering; geographical segments: Australia. 
C)  business segments: mechanical engineering; geographical segments: Australia. 
D)  business segments: industrial manufacturing, project consulting, mechanical engineering, retailing, agriculture; geographical segments: Australia, US.

Question 11

The following information relates to Gimli Ltd and its Elrond segment:   In accordance with AASB 8 Operating Segments,in which years is the Elrond segment a reportable segment?

Accepted Answer

A)  2011, 2012 and 2013 
B)  2012, 2013 and 2014 
C)  2012 and 2014 
D)  2011 and 2015 
A)  2011, 2012 and 2013 
B)  2012, 2013 and 2014 
C)  2012 and 2014 
D)  2011 and 2015

Question 12

AASB 8 requires reconciliation of reported segments' amounts to the entity's reported amount for which of the following items?

Accepted Answer

A)  dividend income 
B)  expenses 
C)  depreciation 
D)  revenues 
A)  dividend income 
B)  expenses 
C)  depreciation 
D)  revenues

Question 13

Discuss the entity-wide disclosures in AASB 8 that need to been made about major customers.

Accepted Answer

Paragraph 34 of AASB 8 requires entity-w

Question 14

Information about operating segments that do not meet any of the quantitative thresholds:

Accepted Answer

A)  should be ignored. 
B)  shall be combined and disclosed in an 'all other segments' category. 
C)  should be combined with other segments that exhibit similar economic characteristics. 
D)  All of the given answers are correct. 
A)  should be ignored. 
B)  shall be combined and disclosed in an 'all other segments' category. 
C)  should be combined with other segments that exhibit similar economic characteristics. 
D)  All of the given answers are correct.

Question 15

For a segment to be reportable,AASB 8 requires that majority of revenues be earned from external parties and the segment satisfies one of the three quantitative thresholds.

Accepted Answer

A) True 
 B)False

Question 16

The guidelines for determining that a segment is reportable in accordance with AASB 8 include:

Accepted Answer

A)  Its segment result, whether a profit or loss, is 10 per cent or more of the combined result of all segments that earned a profit or the combined result of all segments that incurred a loss, whichever is the greater absolute amount. 
B)  Its segment result, if a profit, is 10 per cent or more of the combined result of all segments that made a profit, or if the segment made a loss, its loss is 10 per cent or more of the absolute amount of the total segment losses. 
C)  Its segment result, whether a profit or loss, is 10 per cent or more of the absolute value of the combined results of all segments. 
D)  Its segment result, whether a profit or loss, is 10 per cent or more of the combined result of all segments that earned a profit or the combined result of all segments that incurred a loss, whichever is the lesser absolute amount. 
A)  Its segment result, whether a profit or loss, is 10 per cent or more of the combined result of all segments that earned a profit or the combined result of all segments that incurred a loss, whichever is the greater absolute amount. 
B)  Its segment result, if a profit, is 10 per cent or more of the combined result of all segments that made a profit, or if the segment made a loss, its loss is 10 per cent or more of the absolute amount of the total segment losses. 
C)  Its segment result, whether a profit or loss, is 10 per cent or more of the absolute value of the combined results of all segments. 
D)  Its segment result, whether a profit or loss, is 10 per cent or more of the combined result of all segments that earned a profit or the combined result of all segments that incurred a loss, whichever is the lesser absolute amount.

Question 17

The core principle of AASB 8 Operating Segments is for a reporting entity to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

Accepted Answer

A) True 
 B)False

Question 18

The following segment information relates to Tolkein Enterprises:   Applying the tests for identifying a reportable segment in accordance with AASB 8,which of the above segments qualify for reporting and do the segments satisfy the 75 per cent test?

Accepted Answer

A)  mechanical engineering and retailing, 75 per cent test satisfied; No 
B)  industrial manufacturing, mechanical engineering and retailing, 75 per cent test satisfied; Yes 
C)  project consulting, mechanical engineering and retailing, 75 per cent test satisfied; Yes 
D)  industrial manufacturing, project consulting, mechanical engineering and retailing, 75 per cent test satisfied; No 
A)  mechanical engineering and retailing, 75 per cent test satisfied; No 
B)  industrial manufacturing, mechanical engineering and retailing, 75 per cent test satisfied; Yes 
C)  project consulting, mechanical engineering and retailing, 75 per cent test satisfied; Yes 
D)  industrial manufacturing, project consulting, mechanical engineering and retailing, 75 per cent test satisfied; No

Question 19

Edwards and Smith (1996)found that one of the main reasons companies resisted segment disclosures is:

Accepted Answer

A)  There are unreasonable costs to prepare disclosures. 
B)  Investors were not interested in additional information. 
C)  The financial report had sufficient information for users. 
D)  It means a competitive disadvantage. 
A)  There are unreasonable costs to prepare disclosures. 
B)  Investors were not interested in additional information. 
C)  The financial report had sufficient information for users. 
D)  It means a competitive disadvantage.

Question 20

AASB 8 does not require disclosure of a reportable segment if a segment is mainly transacting with related parties.

Accepted Answer

A) True 
 B)False

Exam 24: Segment Reporting

One of the advantages of AASB segment reporting is?

Which of the following is not likely to be a 'chief operating decision maker' as referred to in AASB 8 Operating Segments?

An important argument for providing segmental information in the financial reports is:

The guidelines to determine that a segment is reportable in accordance with AASB 8 Operating Segments includes:

AASB 8 identifies a number of purposes for segment data.These include to:

In accordance with AASB 8 Operating Segments,which of the following statements is incorrect?

Discuss the specific financial information items that must be disclosed in relation to segment reporting.

The guidelines to determine that a segment is reportable in accordance with AASB 8 Operating Segments includes:

Discuss the reasons for the release of IFRS 8.

The following information relates to Gimli Ltd and its Elrond segment: In accordance with AASB 8 Operating Segments,in which years is the Elrond segment a reportable segment?

AASB 8 requires reconciliation of reported segments' amounts to the entity's reported amount for which of the following items?

Discuss the entity-wide disclosures in AASB 8 that need to been made about major customers.

Information about operating segments that do not meet any of the quantitative thresholds:

For a segment to be reportable,AASB 8 requires that majority of revenues be earned from external parties and the segment satisfies one of the three quantitative thresholds.

The guidelines for determining that a segment is reportable in accordance with AASB 8 include:

The core principle of AASB 8 Operating Segments is for a reporting entity to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

The following segment information relates to Tolkein Enterprises: Applying the tests for identifying a reportable segment in accordance with AASB 8,which of the above segments qualify for reporting and do the segments satisfy the 75 per cent test?

Edwards and Smith (1996)found that one of the main reasons companies resisted segment disclosures is:

AASB 8 does not require disclosure of a reportable segment if a segment is mainly transacting with related parties.

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After the End of the Reporting Period

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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