QUESTION BANK 9

According to PFRS 8, external revenue reported by reportable operating segments must be at least a. 75% of the total revenue of the entity including both internal and external revenues b. 75% of the total external revenue of the entity c. 10% of the total external revenue of the entity d. a majority of the total revenue of the entity including both internal and external revenues

a. 75% of the total revenue of the entity including both internal and external revenues — Stated under PFRS 8.15.

According to PFRS 8, how do firms identify reportable segments? a. By geographic regions b. By product lines c. By industry classification d. By designations used inside the firm

b. By product lines — Stated under PFRS 8, paragraph 12.

After identifying reportable segments using "management approach," a. additional reportable segments are identified using the quantitative thresholds. b. conformance with the limit on external revenues is tested. c. additional reportable segments are identified based on management's judgment. d. the remaining segments are described as "all other segments."

a. additional reportable segments are identified using the quantitative thresholds. — 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 (even if they do not meet the criteria in reportable segments.

Entity-wide disclosures include disclosures about (Item #1) Geographic areas; (Item #2) Allocated costs a. Yes, Yes b. Yes, No c. No, Yes d. No, No

b. Yes, No — Entity-wide disclosures include disclosures of information about; •products and services •geographical areas •major customers

An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except a. Depreciation expense b. Allocated expenses c. Interest expense d. Income tax expense.

b. Allocated expenses — Allocated Expenses are not necessarily disclosed according to PFRS 8.

PFRS 8 Operating Segments is applied in I. Separate or individual financial statements II. Consolidated financial statements a. I only b. I and II c. II only d. neither I nor II

b. I and II — The scope of PFRS 8 includes separate or individual financial statements of an entity and to the consolidated financial statements of a group with a parent.

Operating segments are identified using a "management approach," this means that the identification of operating segments is a. based on internal reporting. b. based on external reporting c. based on quantitative computations d. based on qualitative factors

a. based on internal reporting — Operating segments are identified based on the components of the entity that are considered to be important for internal management reporting purposes

Operating segments may be aggregated if a. they have similar economic characteristics b. they have different economic characteristics c. they have the same chief operating decision maker d. the entity has a matrix organization

a. they have similar economic characteristics — This is justified in the PFRS 8.12.

A non-publicly listed entity may be required to comply with PFRS 8 Operating Segment if a. the entity is a subsidiary whose parent is a listed entity or in the process of issuing securities to the public even in the entity's individual (separate) financial statements b. the entity has a foreign operation c. at least majority of its revenues comes from intercompany transactions d. it discloses segment information in its general-purpose financial statements

d. it discloses segment information in its general-purpose financial statements — PFRS 8 states that an entity shall disclose the general information about how the entity identified its operating segments and the types of products and services from which each operating segment derives its revenues

Under PFRS 8, the method used to determine what information to report for operating segments is referred to as the a. Segment approach. b. Friendly approach. c. Dramatic approach. d. Management approach.

d. Management approach. — Operating Segments are identified based on the components of the entity that are considered to be important for internal management reporting purposes.

Entity-wide disclosures are required by publicly held companies with (Item #1) Only one reportable segment; (Item #2) More than one reportable segment a. Yes, Yes b. Yes, No c. No, Yes d. No, No

d. No, No — It is stated under PFRS 8, paragraph 31, that it is applied to all entities subject to this PFRS including but not limited to single reportable segment.

Which of the following are included in the disclosures required by PFRS 8 Operating Segments? I. revenues from external customers II. revenues from transactions with other operating segments of the same entity III. interest revenue IV. interest expense V. income tax expense or benefit a. I and II b. III, IV, and V c. I, II, III, and IV d. all of the choices

d. all of the choices — Refer to PFRS 8 paragraph 23.

An entity manufactures suits, clothing, bed linen, and various cotton and manmade fiber products. It has several segments, which are reported internally as Segments Sales Profit Segment assets Suits 40% 45% 50% Shirts 30% 35% 33% Bed linen 15% 10% 7% Blinds 8% 6% 5% Cloth 7% 4% 5% 100% 100% 100% The table represents the percentages of sales, profit, and segment assets that are attributable to the different segments. The entity wants to present bed linen and cloth as a single segment but is wondering whether the information can be aggregated. How will the segmental information be presented in the financial statements? a. Bed linen and cloth, suits, and shirts, will all be shown as separate segments with blinds in the other category. b. All of the segments should be presented separately. c. Suits, shirts, and bed linen will be separate segments with blinds and cloth shown as a single segment. d. Suits and cloth will be one segment with shirts, bed linen, and blinds shown as other separate segments.

a. Bed linen and cloth, suits, and shirts, will all be shown as separate segments with blinds in the other category. — If an operating segment is identified as a reportable segment in the current period in accordance with the quantitative thresholds, segment data for a prior period presented for comparative purposes shall be restated to reflect the newly reportable segment as a separate segment.

Disclosures for major customer shall be provided if revenues from transactions with a single external customer amount to a. 10% or more of the entity's external revenues. b. 10% or more of the entity's external and internal revenues. c. 75% or more of the entity's external revenues. d. 75% or more of the entity's external and internal revenues.

b. 10% or more of the entity's external and internal revenues. — PFRS 8.34 states that "if revenues from transactions with a single external customer amount to 10% or more of an entity's revenues, an entity shall disclose that fact, the total amount of revenues from each such customer, and the identity of the segment or segment reporting the revenues."

An entity may combine information about operating segments before performing the quantitative threshold tests if a. the operating segments have similar economic characteristics and share a majority of the aggregation criteria b. the operating segments have similar economic characteristics and share in all of the aggregation criteria c. the operating segments have dissimilar economic characteristics and do not share a majority of the aggregation criteria d. an entity should not combine information about operating segments after performing the quantitative thresholds.

a. the operating segments have similar economic characteristics and share a majority of the aggregation criteria — Visit PFRS 8.14.

PFRS 8 requires the disclosure of information about major customers if revenues from transactions with a single external customer amount to a. 10 per cent or more of an entity's total revenues from external and internal customers b. 10 per cent or more of an entity's total revenues from external customers c. more than 10 per cent of an entity's total revenues from external and internal customers d. more than 10 per cent of an entity's total revenues from external customers

b. 10 per cent or more of an entity's total revenues from external customers — A major customer is defined as a single external customer providing revenue with amounts to 10% or more of an entity's external revenue.

Which of the following are included in the disclosures required by PFRS 8 Operating Segments? I. Depreciation and amortization II. Material items of income and expense disclosed in accordance with PAS 1 III. The entity's interest in the profit or loss of associates and joint ventures accounted for by the equity method IV. Material non-cash items other than depreciation and amortization. a. I and II b. III, IV, and V c. I, II, and III d. all of the choices

d. all of the choices — Refer to PFRS 8 paragraph 23.

An operating segment is a component of an entity: I. that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity) II. whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance III. for which discrete financial information is available a. I only b. II only c. I and II d. all of these

d. all of these — All of these are stated under PFRS 8 Appendix A.

If an operating segment does not meet any of the quantitative threshold, a. it may be combined with other operating segments not meeting the quantitative threshold and the combined information is treated as reportable if the combined results meet any of the quantitative thresholds. b. it may be included in "all other segments" c. it may nevertheless be reportable if management believes information on this segment is relevant d. any of these

d. any of these — Presented under PFRS 8.12-14.

If the total external revenue reported by operating segments does not meet the limit provided under PFRS 8, additional operating segments shall be identified as reportable segments until the limit is met. Other operating segments may be included as reportable a. if they meet all of the quantitative thresholds b. if they meet any of the quantitative thresholds c. if they meet at least a majority of the quantitative thresholds d. even if they do not meet any of the quantitative thresholds

d. even if they do not meet any of the quantitative thresholds — Justified under PFRS 8.15.

In financial reporting for segments of a business enterprise, segment data may be aggregated a. Before performing the 10% tests if a majority of the aggregation criteria are met. b. If the segments do not meet the 10% tests but meet all of the aggregation criteria. c. Before performing the 10% tests if all of the aggregation criteria are met. d. If any one of the aggregation criteria are met.

a. Before performing the 10% tests if a majority of the aggregation criteria are met. — Under PFRS 8, Segment data should be aggregated first before performing the 10% tests.

Two or more operating segments may be aggregated into a single operating segment if the segments have similar economic characteristics, and the segments are similar in which of the following respects: I. the nature of the products and services; II. the nature of the production processes; III. the type or class of customer for their products and services; IV. the methods used to distribute their products or provide their services; V. if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities. a. I, II, or III only b. I, II, III, and IV only c. any of I, II, III, IV, or V d. all of these before 10% tests; majority of these after 10% tests.

d. all of these before 10% tests; majority of these after 10% tests. — This is consistent with the core principles of IFRS.

An entity shall report separately information about each operating segment that: I. Management deems relevant to external users II. Meets the quantitative thresholds a. I b. I or II c. II d. neither I nor II

d. neither I nor II — Justified under PFRS 8, paragraph 12.

After identifying operating segments based on internal reporting, management must decide which of the segments should be reported separately. a. If two or more of the segments have essentially the same business activities in essentially the same economic environment, information for these individual segments may be combined (aggregated). b. If two or more of the segments have essentially dissimilar business activities in essentially the same economic environment, information for these individual segments may be combined (aggregated). c. If two or more of the segments have essentially the same business activities in essentially the same economic environment, information for these individual segments shall be reported separately. d. a or c

a. If two or more of the segments have essentially the same business activities in essentially the same economic environment, information for these individual segments may be combined (aggregated) — Stated under PFRS 8, paragraph 12.

According to PFRS 8, there may be a practical limit to the number of reportable segments that an entity separately discloses beyond which segment information may become too detailed. Although no precise limit has been determined, if the number of segments that are reportable in accordance with the quantitative threshold reaches this number, the entity should consider whether a practical limit has been reached. a. above ten (10) b. above three (3) c. below ten (10) d. below three (3)

a. above ten (10) — This is with accordance to PFRS 8 paragraphs 13-18

Total external revenue reported by operating segments should a. at least be 75 per cent of the entity's revenue b. not be more than 75% of the entity's revenue c. at least be 90% of the entity's revenue d. no limit set by PFRS 8

a. at least be 75 per cent of the entity's revenue — Stated under PFRS 8, paragraph 15.

Nonreportable segments should a. be aggregated and reported as "all other segments." b. be aggregated but neither reported nor disclosed c. not reported but may be disclosed if included in the necessary reconciliation of segment assets, liabilities, or profit or loss d. not reported but may be disclosed whether or not included in the necessary reconciliation of segment assets, liabilities, or profit or loss

a. be aggregated and reported as "all other segments." — Refer to PFRS 8, paragraph 16.

For segment reporting, interest revenue and interest expense a. are reported separately for each reportable segment b. may be presented at net amount if the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment c. are not reported d. a or b

d. a or b — This can be seen in the PFRS 8.23.

PFRS 8 aims to help users of financial statements a. Better understand enterprise performance b. Better assess its prospects for future net cash flows c. Make more informed judgments about the entity as a whole d. all of the choices

d. all of the choices — It is stated in PFRS 8, core principle of segment reporting.

The following are required under PFRS 8 Operating Segments to disclose segment information in its financial statements. I. entities whose equity or debt securities are publicly traded II. entities that are in the process of issuing equity or debt securities in public securities markets III. entities whose securities are not publicly traded or not in the process of issuing securities to the public. a. I and II b. I only c. II only d. None of these

a. I and II — Justified under PFRS 8.2.

A retail chain may have 20 stores that individually meet the definition of an operating segment but each store is essentially the same. I. In this case management may desire to combine the 20 stores into one operating segment. II. In this case management may desire to combine the 20 stores into one operating segment described as "all other segments". a. I only b. II only c. I and II d. Neither I nor II

a. I only — Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of this IFRS, the segments have similar economic characteristics, and the segments are similar

An entity may combine information about operating segments that do not meet the quantitative thresholds with information about other operating segments that do not meet the quantitative thresholds to produce a reportable segment only if a. the operating segments have similar economic characteristics and share a majority of the aggregation criteria b. the operating segments have similar economic characteristics and share in all of the aggregation criteria c. the operating segments have dissimilar economic characteristics and do not share a majority of the aggregation criteria d. an entity should not combine information about operating segments after performing the quantitative thresholds.

a. the operating segments have similar economic characteristics and share a majority of the aggregation criteria — PRFS 8, paragraph 14.

Regarding disclosure of major customers, which of the following are in accordance with the provisions of PFRS 8 Operating Segments? I. A single external customer is considered a major customer necessitating disclosure if revenues from transactions with that single external customer amount to 10% or more of an entity's revenues. II. The total amount of revenues from each major customer should be disclosed. III. The identity of the segment or segments reporting the revenues from major customers should be disclosed. IV. The identity of a major customer should be disclosed. V. The amount of revenues from major customers that each segment reports should be disclosed. VI. A group of entities known to a reporting entity to be under common control shall be considered separate customers, and a government (national, state, provincial, territorial, local or foreign) and entities known to the reporting entity to be under the control of that government shall be considered separate customers. a. I, II, III b. I, II, III, VI c. I, II, III, IV, V d. I, II, III, IV, V

b. I, II, III, VI — Statement IV and V are not required by the PFRS 8.

In financial reporting for segments of a business, an enterprise shall disclose all of the following except a. Types of products and services from which each reportable segment derives its revenues. b. The title of the chief operating decision maker of each reportable segment. c. Factors used to identify the enterprises reportable segments. d. The basis of measurement of segment profit or loss and segment assets.

b. The title of the chief operating decision maker of each reportable segment. — The title of the chief operating decision maker of each reportable segment is not disclosed based on PFRS 8 paragraph 21.

An entity has split its business segments on the basis of the law governing its different types of business. Two business divisions that the entity has identified are insurance and banking. Within the banking group, several different services are provided: retail banking, merchant banking, and small business advisory service. The insurance entities sell travel insurance, health insurance, and property insurance. The entity operates throughout the world in several countries and continents. The operating results of each type of service are regularly reviewed by the entity's executive committee to make decisions about resources to be allocated the type of service and assess their performance. What basis should the entity report its segmental information? a. On the basis of its business divisions. b. By geographical location. c. On the basis of the services it offers within those divisions. d. The entity should just show one segment, entitled banking and insurance.

c. On the basis of the services it offers within those divisions. — Operating segments are identified based on internal reports regarding the entity's components that are regularly reviewed by the chief operating decision maker and in this case, components related to its services are regularly reviewed for making decisions.

An entity operates in the gas industry and has four different productive processes within the production cycle. It is essentially a vertically integrated business. The entity proposes to disclose segmental information regarding each of the four operations. Can the entity disclose separately as business segments the four operations within the production cycle? a. No, it must show a single segment covering all the various operations. b. PFRS 8 says that it is compulsory to show each different operation separately. c. PFRS 8 encourages voluntary disclosure of the segments, and it is considered to be good practice. d. The entity should group together various operations and show exploration, production, and chemicals as one segment and retailing as another segment.

c. PFRS 8 encourages voluntary disclosure of the segments, and it is considered to be good practice. — An entity shall 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.

Which of the following statements is/(are) correct? I. If an entity that is not required to apply PFRS 8 Operating Segments chooses to disclose information about segments that does not comply with PFRS 8, it shall not describe the information as segment information. II. PFRS 8 does not require an entity to report information that is not prepared for internal use if the necessary information is not available and the cost to develop it would be excessive. III. If a financial report contains both the consolidated financial statements of a parent that is within the scope of PFRS 8 as well as the parent's separate financial statements, segment information is required only the consolidated financial statements. IV. PFRS 8 requires an entity to report interest revenue separately from interest expense for each reportable segment unless a majority of the segment's revenues are from interest and the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment and to make decisions about resources to be allocated to the segment. PAS 14, the predecessor of PFRS 8, did not require such disclosure. V. Generally, an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. VI. The term "segment manager" identifies a function which should be a segment manager with a specific title. a. VI only b. I and II c. all except VI d. all of the statements

c. all except VI — Segment manager identifies a function that is not necessarily manager with a specific title.

Operating segments that may be aggregated are those which exhibit similar economic characteristics and are similar in the following, except a. the nature of the products and services, their production processes, and distribution methods b. the type or class of customer for their products and services c. their financial position, financial performance, and cash flows d. regulatory environment The aggregation criteria can be seen in the PFRS 8.12.

c. their financial position, financial performance, and cash flows — The aggregation criteria can be seen in the PFRS 8.12.

Which of the following statements is incorrect? a. A "management approach" is used in identifying operating segments. b. A reportable operating segment is one which management uses in making decisions about operating matters or results from aggregation of two or more segments and qualify under any of the quanti tative thresholds. c. Even if an operating segment does not qualify in any of the quantitative thresholds, such operating segment may still be reportable if management believes that information about the segment would be useful to users of the financial statements. d. Disclosures for major customer shall be provided if revenues from transactions with a single external customer amount to 75% or more of the entity's external revenues.

d. Disclosures for major customer shall be provided if revenues from transactions with a single external customer amount to 75% or more of the entity's external revenues. — Disclosure for major customer shall be provided if revenues from transactions with single external customer amount to 10% or more of an entity's external revenue.

State the correct sequence of identifying and reporting operating segments in accordance with PFRS 8. I. Non-reportable segments are combined and disclosed in an "all other segments" category. II. The segments are tested under the quantitative thresholds. III. Operating segments are identified based on management's internal reporting system. IV. Segments that have similar economic characteristics and are similar in a majority of the respects enumerated in PFRS 8 are aggregated and their combined revenues, profit or loss, and assets are tested under the quantitative thresholds. V. Segments that have similar economic characteristics and are similar in all of the respects enumerated in PFRS 8 are aggregated. VI. The total external revenues of the identified reportable segments are tested under the 75% limit on external revenues. VII. Additional operating segments are identified as reportable segments until at least 75% of the entity's external revenue is included in reportable segments. a. III, V, IV, II, VI, VII, I b. III, V, II, IV, VI, VII, I c. II, III, V, IV, VI, VII, I d. III, II, V, IV, VI, VII, I

b. III, V, II, IV, VI, VII, I — The sequence of identifying and reporting operating segments must be in accordance with the standard that PFRS has set.

Which one of the following disclosures is not required under PFRS 8? a. The total amount of revenues from a major external customer (with revenues from that external customer exceeding 50% of the entity's revenues). b. The identity (say, the name) of a major customer that accounts for 20% of the entity's revenues. c. Revenue from external customers attributed to the entity's country of domicile and attributed to all foreign countries in total from which the entity derives revenues (assuming that necessary information is available and the cost to develop it is not excessive). d. Revenues from external customers for each product and service, or each group of similar products and services, unless the necessary information is not available and the cost to develop it would be excessive.

b. The identity (say, the name) of a major customer that accounts for 20% of the entity's revenues. — Stated under PFRS 8, paragraph 24.

An entity is engaged in the manufacturing industry and has recently purchased an 80% holding in a small financial services group. This group does not meet any of the threshold criteria for a reportable segment. Can the entity disclose the financial services group as a separate business segment? a. No, because it does not meet any of the PFRS criteria, it cannot be disclosed as a separate segment. b. Yes, even though it does not meet the PFRS criteria, an entity can disclose business segments separately if they are a distinguishable component. c. The entity can disclose only 80% of the results and net assets of the banking group. d. Because of the disparity in types of business, the group should disclose its segmental information on a geographical basis.

b. Yes, even though it does not meet the PFRS criteria, an entity can disclose business segments separately if they are a distinguishable component. — 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.

The accounting system that permits management to break down segments of a business into cost centers and to place accountability on those individuals responsible for the incurrence of these costs a. operations research accounting b. responsibility accounting c. control accounting d. budgetary accounting

b. responsibility accounting — Responsibility accounting is a system of control where responsibility is assigned for the control of costs.

PFRS 8 requires that an entity should provide reconciliations of segment information to the entity's financial information. One of the following reconciliations is not required by PFRS 8. Which one is it? a. The total of the reporting segments' revenues to the entity's revenues. b. The total of the reportable segments' measures of profit or loss to the entity's profit or loss before tax expense (tax income) and discontinued operations, and if the entity allocates to reportable segments items such as tax expense (tax income), the entity may reconcile the total of the segments' measures of profit or loss to the entity's profit or loss after those items. c. The total number of major customers of all segments to the total number of major customers of the entity. d. The total of the reportable segments' assets to the entity's assets.

c. The total number of major customers of all segments to the total number of major customers of the entity. — Refer to PFRS 8 paragraph 28.

In financial reporting for segments of a business enterprise, which of the following should be taken into account in computing the amount of an industry segment's identifiable assets? (Item #1) Accumulated depreciation; (Item #2) Marketable securities valuation allowance a. No, No b. No, Yes c. Yes, Yes d. Yes, No

c. Yes, Yes — The Standard therefore requires explanations of the basis on which the segment information is prepared and reconciliations to the amounts recognized in the income statement and balance sheet (PFRS 8).

PFRS 8 is required to be applied by a. entities whose equity securities are traded in a public market and those entities who are in the process of filing its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market b. entities whose debt and equity securities are traded in a public market. c. entities whose debt and equity securities are traded in a public market and those entities who are in the process of filing its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market d. all entities regardless of whether their securities are being traded or not

c. entities whose debt and equity securities are traded in a public market and those entities who are in the process of filing its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market — Refer to PFRS 8 paragraph 2.

Which of the following tests may be used to determine if an operating segment of an entity is a reportable segment under the provision of PFRS 8 regarding quantitative thresholds? a. Its revenue (both from external customers and internal segments) is equal to or greater than 10 percent of total revenue (external and external). b. The absolute value of its operating profit or loss is equal to or greater than 10 percent of the higher of the total of the operating profit for all segments that reported profits and the total of the losses for all segments that reported losses. c. The segment contains 10 percent or more of the combined assets of all operating segments. d. All of the above.

d. All of the above. — Refer to PFRS 8 paragraph 13

Assume an entity identified its operating segments as segments A, B, C, D, and E with A and B as the only reportable segments. The sum of the external revenues of A and B constitutes less than 75% of the total external revenue of the entity. Which of the following statements is incorrect? a. Additional operating segments should be identified as reportable b. If management judges that of the other remaining segments (C, D and E), information on segment C will be important to users, then C will be included as a reportable segment even though it was previously not assessed as reportable. c. If management judges that C and E should be aggregated, then C and E will be aggregated and included as additional reportable segment even if their combined results do not meet any of the quantitative thresholds. d. Any of these may be acceptable

d. Any of these may be acceptable — All of these are acceptable based on PFRS 8

According to PFRS 8, the quantitative thresholds are I. at least 10% of total revenues (external and internal), II. at least 10% of the higher of total profits of segments reporting profits and total losses of segments reporting losses, in absolute amount (i.e., disregarding negative amounts. III. at least 10% of total assets (inclusive of intersegment receivables). a. I only b. II only c. III only d. I, II and III

d. I, II and III — The Quantitative Thresholds are presented in the PFRS 8.13.

Not all operating segments would automatically qualify as reportable segments. PFRS 8 prescribes criteria for an operating segment to qualify as a reportable segment; these are alternative quantitative thresholds. One of the quantitative thresholds listed below is not a requirement of PFRS 8. Which one is it? a. Its reported revenue, from both external customers and intersegment sales or transfers, is 10% or more of the combined revenue, internal and external, of all operating segments. b. The absolute measure of its reported profit or loss is 10% or more of the greater, in absolute amount, of (1) the combined reported profit of all operating segments that did not report a loss and (2) the combined reported loss of all operating segments that reported a loss. c. Its assets are 10% or more of the combined assets of all operating segments. d. Its assets are 20% or more of the combined assets of all operating segments.

d. Its assets are 20% or more of the combined assets of all operating segments. — The assets of segment are 10% or more instead of 20% of the combined assets of all operating segments.

Which of the following is not required under current standards for disaggregated information relating to geographic area information? a. Revenues from external customers from the home country of the firm and from all foreign countries in total. b. The total of long-lived assets located in the firm's home country and located in foreign countries. c. Operating profits from external customers from the home country of the firm and from all foreign countries in total. d. Revenues for any foreign country for which the revenues from that country are material to the firm.

d. Revenues for any foreign country for which the revenues from that country are material to the firm. — Under PFRS 8, paragraph 33, if revenues from external customers attributed to an individual foreign country are material, those revenues shall be disclosed separately.

An entity is in the entertainment industry and organizes outdoor concerts in four different areas of the world: Europe, North America, Australasia, and Japan. The entity reports to the board of directors on the basis of each of the four regions. The management accounts show the profitability for each of the four regions, with allocations for that expenditure which is difficult to directly charge to a region. The concerts are of 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 Australasia 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.

d. Segment information should be reported for each of the four different regions. — PFRS 8 applies to the separate or individual financial statements of an entity (and to the consolidated financial statements of a group with a parent)

Which of the following may not be considered as the chief operating decision maker of an entity? a. Chief Executive Officer (CEO) b. Executive Committee c. Chief Operating Officer (COO) d. Shareholders

d. Shareholders — This is stated in the PFRS 8.7.

Which statement is not true with respect to a "chief operating decision maker" as envisaged by PFRS 8? a. The term "chief operating decision maker" identifies a function and not necessarily a manager with a specific title. b. In some cases the "chief operating decision maker" could be its chief operating officer. c. The Board of directors (Board), acting collectively, could qualify as the "chief operating decision maker." d. The chief internal auditor who reports to (and takes directions from) the Board usually plays a very important role in any organization and would generally qualify as a "chief operating decision maker."

d. The chief internal auditor who reports to (and takes directions from) the Board usually plays a very important role in any organization and would generally qualify as a "chief operating decision maker." — PRFS 8, paragraph 7-8.

Which one of the following statements is not true in the context of PFRS 8? a. The present PFRS on segmental reporting requires entities to report segmental information using a "management approach" that allows the financial statement user to review segmental information from the "eyes of the management." b. The "core principle" of PFRS 8 requires that an entity should disclose information to enable users of its financial statements to evaluate the nature and financial effects of the types of business activities in which it engages and the economic environments in which it operates. c. If an entity that is not required to apply PFRS 8 (such as an entity whose equity or debt is not traded in a public market) but still chooses to disclose information about segments in its financial statements, it shall not describe the information as segment information. d. The present PFRS on segmental reporting requires entities to report segmental information using a "risks and rewards" approach.

d. The present PFRS on segmental reporting requires entities to report segmental information using a "risks and rewards" approach. — IFRS has abandoned the "risk and reward approach" of segment operations.