PAS 14 SEGMENT REPORTING

1. It is a distinguishable component of an enterprise that is engaged in providing an individual products or service or a

group of related product or service
a. business segment b. geographical segment c. segment reportable segment

2. In financial reporting for segments of a business enterprise, the segment results includes a portion of
a. Interest expense c.Indirect operating expenses
b. Extraordinary losses d. General corporate expenses

3. The method used to determine what information to report for business segments is referred to as
a. Segment approach b. Management approach c. Operating approach d. Enterprise approach

4. A group is organized into a number of business divisions across the world. The group has two main classes of
business: insurance and banking. The management Board receives information from each business division on a quarterly
basis and wishes to report segmental information on the basis of these divisions. What should be the group’s reporting of
the primary segmental information?
a. The worldwide business divisions
b. The classes of business
c. The entity should make full disclosure on the basis of the worldwide divisions and the classes of business
d. It would depend on the different risks and rewards but is likely to be the different classes of business.

5. An entity is in the entertainment industry and organizes outdoor concerts in four different areas of the world: Europe,
North America, Australia, and Japan. The entity reports to the board of directors on the basis of each of the four regions.
The concerts are two types: popular music and classical music. What is the appropriate basis for segment reporting in this
entity?
a. The segments should be reported by class of business, that is popular and classical music.
b. The segments should be reported by region, so Australia and Japan would be combined
c. The segment information should be reported as North America and the rest of the world.
d. Segment information should be reported for each of the four different regions.

6. Segment assets include all of the following, except

a. Income tax assets
b. Goodwill directly attributable to a segment
c. Operating assets shared by two or more segments
d. Current assets used in the operating activities of the segment

7. What is the approach of looking into an enterprise’s organizational and management structure and its financial
reporting system in order to identify the enterprise’s geographical and business segments?
a. Enterprise approach c. Operating approach
b. Segment approach d. Management approach

8. A business or geographical segment is a reportable segment if a majority of its revenue is earned from sales to
external customers and (choose the incorrect one)
a. Segment internal and external revenue is 10% or more of total internal and external revenue of all segments
b. Segment external revenue is 10% or more of total internal and external revenue of all segments
c. Segment result is 10% or more of the combined result of all segments in profit or combined result of all segments in
loss, whichever is greater in absolute amount
d. Segment assets are 10% or more of the total assets of all segments

9. Under IAS 14 Segment Reporting, where a segment is not primarily of a financial nature, segment revenue will include:
a. interest income; b. dividend income; c. gain on sale of investments; d. an entity’s share of profit of
associates.

10. According to IAS 14 Segment Reporting, segment revenue includes all of the following items:
I. A joint venturer’s share of the revenue of a jointly controlled entity that is accounted for by
proportionate consolidation.
II. An entity’s share of profits or losses of associates.
III. An entity’s share of other investments accounted for under the equity method.
IV. Gains on the extinguishment of debt.
a. I, II, III and IV; b. I, II and III only; c. III and IV only; d. II and III only.

11. Under IAS 14 Segment Reporting, segment expense include:

a joint venturer’s share of the expenses of a jointly controlled entity that is accounted for by a proportionate
consolidation;
b. income tax expense;
c. interest, unless the segment’s operations are primarily of a financial nature;
d. general administrative expenses that relate to the entity as a whole.

12. Under IAS 14 Segment Reporting, segment result is described as:

a. total segment income;
b. segment revenue less segment expense;
c. segment profit after any adjustments for minority interests;
d. segment profit after any adjustments for income tax.

13. According to IAS 14 Segment Reporting, segment assets do not include:

a. income tax assets;
b. a joint venturer’s share of the operating assets of a jointly controlled entity that is accounted for by proportionate
consolidation;
c. investments accounted for under the equity method where the profit or loss from such investments is included in
segment revenue;
d. operating assets employed by a segment in its operating activities that can be allocated to the segment on a
reasonable basis.

14. According to IAS 14 Segment Reporting, segment liabilities exclude:

a. liabilities that result from the operating activities of a segment that are directly attributable to a segment;
b. interest bearing liabilities if the segment result excludes interest expense;
c. income tax liabilities;
d. a joint venturer’s share of the liabilities of a jointly controlled entity that is accounted for by proportionate
consolidation.

15. Under IAS 14 Segment Reporting, a segment is reportable if a majority of its sales are to external customers and its:
a. revenue from external customers is 10% or more of total revenue;
b. result is 5% or more of the combined result of all segments;
c. liabilities are 5% or more of total liabilities;
d. assets are 5% or more of total assets.

16. According to IAS 14 Segment Reporting, if an entity has two segments and the primary segment is a geographic
segment, then the secondary segment will be:
a. a business segment;
b. a organisational segment;
c. an economic segment;
d. a financial segment.

17. Cherry Group has operations in three different geographic locations. It has total assets as follows:
 Region 1 P400 000
 Region 2 P80 000
 Region 3 P20 000
The reportable geographic segments are:
a. All regions are reportable segments;
b. Region 1 and 2 are the only reportable segments;
c. Regions 2 and 3 are the only reportable segments;
d. Region 1 is the only reportable segment.

18. Under IAS 14 Segment Reporting, separate segments of an entity must be identified as reportable segments until at
least:
a. 100% of total entity result is included;
b. 80% of total entity liabilities are included;
c. 75% of total entity revenue is included;
d. 70% of total entity assets are included.

19. When an entity’s primary segment format is geographical segments, in relation the segment result, it is required to
make the following disclosures:
a. segment result by location of assets;
b. segment result by location of customers;
c. segment result by location of business segment;
d. segment result after tax.

20. If an entity’s primary segment format is geographical segments by location of customers, under IAS 14 Segment
Reporting, it is required to make the following disclosures:
a. depreciation and amortisation by location of assets;
b. depreciation and amortisation by location of liabilities;
c. depreciation and amortisation by business segment;
d. depreciation and amortisation expense, by location of customers.

21. A geographical segment may be

a. a single coutry
b. a group of 2 or more countries
c. a or b
d. neither a nor b
22. It is a business segment or a geographical segment for which segment information is required to be disclosed
a. Reportable segment b. Accountable segment c. Measurable segment d. Ordinary segment

23. In financial reporting of segment data, which of the following items is used in determining segment’s operating
income?
a. Income tax expense b. Sales to other segments c. General corporate expense d. Gain or loss on discontinued
operations

24.
ANSWER KEY:
1. A
2. C
3. B
4. D
5. D
6. A
7. D
8. B
9. D
10. B
11.A
12.B
13.A
14. C
15. A
16. A
17. B
18. C
19. A
20. D
21. C
22.