Testbank

to accompany

Applying International
Accounting Standards
by
Alfredson, Leo, Picker, Pacter & Radford

Prepared by
Victoria Wise

John Wiley & Sons Australia, Ltd 2005

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CHAPTER 24 Segment reporting

Question 1

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 entitys share of profit of associates.

Question 2

According to IAS 14 Segment Reporting, segment revenue includes all of the following items:

I. A joint venturers share of the revenue of a jointly controlled entity that is

accounted for by proportionate consolidation.
II. An entitys share of profits or losses of associates.
III. An entitys 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.

Question 3

Under IAS 14 Segment Reporting, segment expense include:

A a joint venturers 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 segments operations are primarily of a financial nature;
D general administrative expenses that relate to the entity as a whole.

Question 4

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

A total segment income;

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B segment revenue less segment expense;

C segment profit after any adjustments for minority interests;
D segment profit after any adjustments for income tax.

Question 5

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

A income tax assets;

B a joint venturers 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.

Question 6

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 venturers share of the liabilities of a jointly controlled entity that is accounted
for by proportionate consolidation.

Question 7

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.

Question 8

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:

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A a business segment;
B a organisational segment;
C an economic segment;
D a financial segment.

Question 9

Cherry Group has operations in three different geographic locations. It has total assets as
follows:

Region 1 $400 000

Region 2 $80 000
Region 3 $20 000

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.

Question 10

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.

Question 11

When an entitys 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.

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Question 12

If an entitys 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.

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ANSWERS

1 D

2 B

3 A

4 B

5 A

6 C

7 A

8 A

9 B

10 C

11 A

12 D

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