Question 1

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

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)  Provide relevant and reliable information to users about geographically related risks and returns. 
E)  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)  Provide relevant and reliable information to users about geographically related risks and returns. 
E)  All of the given answers.

Question 2

Gollum Ltd provides the following segment information:   There are no inter-segment sales.Which of the segments are reportable applying only the segment result test?

Accepted Answer

A)  Business segments: Industrial manufacturing, project consulting, retailing, agriculture; Geographical segments: Australia, Pacific Islands, US. 
B)  Business segments: Industrial manufacturing, project consulting; Geographical segments: Australia. 
C)  Business segments: Industrial manufacturing, project consulting, mechanical engineering, retailing, agriculture; Geographical segments: Australia, Pacific Islands, US. 
D)  Business segments: Industrial manufacturing, project consulting, agriculture; Geographical segments: Australia, Pacific Islands. 
E)  None of the given answers. 
A)  Business segments: Industrial manufacturing, project consulting, retailing, agriculture; Geographical segments: Australia, Pacific Islands, US. 
B)  Business segments: Industrial manufacturing, project consulting; Geographical segments: Australia. 
C)  Business segments: Industrial manufacturing, project consulting, mechanical engineering, retailing, agriculture; Geographical segments: Australia, Pacific Islands, US. 
D)  Business segments: Industrial manufacturing, project consulting, agriculture; Geographical segments: Australia, Pacific Islands. 
E)  None of the given answers.

Question 3

If a financial report contains both the consolidated financial statements of a parent and the parent's separate financial statements,segment information is required for both statements.

Accepted Answer

A) True 
 B)False

Question 4

The following information is provided for Gandalf LtD.   The only inter-segment sales within the entity are that the marine transport segment's revenues are 35 per cent from inter-segment sales and the light manufacturing segment has 60 per cent of its sales generated through inter-segment sales.Which segments are reportable according to the guidelines provided in AASB 114?

Accepted Answer

A)  Business segments: Retailing, marine transport, general insurance; Geographical segments: Australia, US. 
B)  Business segments: Retailing, light manufacturing, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
C)  Business segments: Retailing, light manufacturing, marine transport, general insurance; Geographical segments: Australia, US. 
D)  Business segments: Retailing, light manufacturing, mining, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
E)  None of the given answers. 
A)  Business segments: Retailing, marine transport, general insurance; Geographical segments: Australia, US. 
B)  Business segments: Retailing, light manufacturing, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
C)  Business segments: Retailing, light manufacturing, marine transport, general insurance; Geographical segments: Australia, US. 
D)  Business segments: Retailing, light manufacturing, mining, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
E)  None of the given answers.

Question 5

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. 
E)  None of the given answers. 
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. 
E)  None of the given answers.

Question 6

Segment assets are:

Accepted Answer

A)  The net value of assets that are directly employed by a segment in its activities. 
B)  The gross value of assets attributable to the segment plus any share of centrally held assets that contribute to segment activities indirectly. 
C)  The current assets that constitute the working capital of the segment and are used directly in its activities plus any non-current assets specifically held for the purpose identified as the segment's business or geographical activity. 
D)  Those assets that are employed by a segment in its operating activities and that either are directly attributable to the segment or can be allocated to that segment on a reasonable basis. 
E)  None of the given answers. 
A)  The net value of assets that are directly employed by a segment in its activities. 
B)  The gross value of assets attributable to the segment plus any share of centrally held assets that contribute to segment activities indirectly. 
C)  The current assets that constitute the working capital of the segment and are used directly in its activities plus any non-current assets specifically held for the purpose identified as the segment's business or geographical activity. 
D)  Those assets that are employed by a segment in its operating activities and that either are directly attributable to the segment or can be allocated to that segment on a reasonable basis. 
E)  None of the given answers.

Question 7

AASB 8 identifies five factors that are to be considered in determining whether or not products and services are related for the purposes of defining a business segment.It further specifies that the products and services included in a business segment must be similar with respect to all these factors:

Accepted Answer

A) True 
 B)False

Question 8

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 9

Identification of operating segments in AASB 8 "Operating Segments" adopts a 'rules-based' approach,while its predecessor AASB 114 "Segment Reporting" adopts a 'principles-based' approach.

Accepted Answer

A) True 
 B)False

Question 10

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; 
E)  President of the reporting entity 
A)  Executive committee of the board 
B)  Chief executive officer; 
C)  Chief operating officer; 
D)  Chief accountant; 
E)  President of the reporting entity

Question 11

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 result, 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 result, 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 result, 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. 
E)  None of the given answers. 
A)  Its segment result, whether a profit or loss result, 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 result, 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 result, 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. 
E)  None of the given answers.

Question 12

Which operating segments are considered to be reportable under AASB 8 using the segment asset qualitative threshold?

Accepted Answer

A)  All segments are reportable. 
B)  Retail and agriculture. 
C)  Retail, agriculture and brewing 
D)  Retail, agriculture and chemicals 
E)  None of the given answers 
A)  All segments are reportable. 
B)  Retail and agriculture. 
C)  Retail, agriculture and brewing 
D)  Retail, agriculture and chemicals 
E)  None of the given answers

Question 13

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

Question 14

Management may be concerned that segment reporting will put the entity at competitive disadvantage,so it has been suggested that it can avoid providing accurate segment reports through opportunistic interpretation of the definition of a business segment:

Accepted Answer

A) True 
 B)False

Question 15

The following segment information is presented for Hobbitt LtD.   There are no inter-segment sales.Which segments are reportable according to the guidelines provided in AASB 114?

Accepted Answer

A)  Business segments: Retailing, light manufacturing, mining, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
B)  Business segments: Retailing, marine transport; Geographical segments: Australia, US. 
C)  Business segments: Light manufacturing, mining, marine transport, general insurancE. Geographical segments: Australia, US. 
D)  Business segments: Retailing, mining, marine transport; Geographical segments: Australia, US. 
E)  None of the given answers. 
A)  Business segments: Retailing, light manufacturing, mining, marine transport, general insurance; Geographical segments: Australia, Europe, US. 
B)  Business segments: Retailing, marine transport; Geographical segments: Australia, US. 
C)  Business segments: Light manufacturing, mining, marine transport, general insurancE. Geographical segments: Australia, US. 
D)  Business segments: Retailing, mining, marine transport; Geographical segments: Australia, US. 
E)  None of the given answers.

Question 16

Which operating segments are considered to be reportable under AASB 8 using the absolute amount of its reported profit or loss qualitative threshold?

Accepted Answer

A)  All segments are reportable. 
B)  Retail and agriculture. 
C)  Retail, agriculture and brewing 
D)  Retail, agriculture and chemicals 
E)  None of the given answers 
A)  All segments are reportable. 
B)  Retail and agriculture. 
C)  Retail, agriculture and brewing 
D)  Retail, agriculture and chemicals 
E)  None of the given answers

Question 17

AASB 8 specifies guidelines regarding whether or not a segment is reportable.These guidelines are known as the 10 per cent rules.All three rules are required to be met in order to establish a reportable segment:

Accepted Answer

A) True 
 B)False

Question 18

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. 
E)  shall be combined and disclosed in an "all other segments" category and should be combined with other segments that exhibit similar economic characteristics 
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. 
E)  shall be combined and disclosed in an "all other segments" category and should be combined with other segments that exhibit similar economic characteristics

Question 19

Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of AASB 8,or the segments have similar economic characteristics,or the segments are similar in the nature of the products and services.

Accepted Answer

A) True 
 B)False

Question 20

AASB 8 "Operating Segments" requires an entity to report a measure of segment liabilities and particular income and expense items,if such measures are regularly provided to the chief operating officer.

Accepted Answer

A) True 
 B)False

Exam 25: Segment Reporting

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

Gollum Ltd provides the following segment information: There are no inter-segment sales.Which of the segments are reportable applying only the segment result test?

If a financial report contains both the consolidated financial statements of a parent and the parent's separate financial statements,segment information is required for both statements.

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

Segment assets are:

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.

Identification of operating segments in AASB 8 "Operating Segments" adopts a 'rules-based' approach,while its predecessor AASB 114 "Segment Reporting" adopts a 'principles-based' approach.

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

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

Which operating segments are considered to be reportable under AASB 8 using the segment asset qualitative threshold?

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

Management may be concerned that segment reporting will put the entity at competitive disadvantage,so it has been suggested that it can avoid providing accurate segment reports through opportunistic interpretation of the definition of a business segment:

The following segment information is presented for Hobbitt LtD. There are no inter-segment sales.Which segments are reportable according to the guidelines provided in AASB 114?

Which operating segments are considered to be reportable under AASB 8 using the absolute amount of its reported profit or loss qualitative threshold?

AASB 8 specifies guidelines regarding whether or not a segment is reportable.These guidelines are known as the 10 per cent rules.All three rules are required to be met in order to establish a reportable segment:

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

Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of AASB 8,or the segments have similar economic characteristics,or the segments are similar in the nature of the products and services.

AASB 8 "Operating Segments" requires an entity to report a measure of segment liabilities and particular income and expense items,if such measures are regularly provided to the chief operating officer.

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financ

Theories of Financial Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluation 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 Lease

Set-Off and Extinguishment of Debt

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 E

Accounting for Share-Based Payments

Accounting for Income Taxes

Cash-Flow Statements

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After Balance Sheet Date

Related-Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transact

Further Consolidation Issues II: Accounting for Minority Interests

Further Consolidation Issues III: Accounting for Indirect Ownershi

Further Consolidation Issues Iv: Accounting for Changes in the Deg

Accounting for Equity Investments

Accounting for Equity Investments

Accounting for Foreign Currency Transactions

Translation of the Accounts of Foreign Operations

Accounting for Corporate Social Responsibility

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