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ACCA Strategic Professional · Strategic Business Reporting (International) · Presentation and disclosure in financial statements

Tavish Group has the following operating segments (revenue including inter-segment sales, $m): A 52, B 30, C 8, D 6, E 4. Total revenue of all segments is $100m. Segment profits are A 6, B 4, C 1, D 0.8, E 0.4 (all profits; no segment has a loss), and segment assets are each proportionate to revenue. Applying only the 10% quantitative thresholds in IFRS 8, which segments must be separately reported?

Only segments A and B meet the 10% thresholds, with revenue of $52m and $30m against a $10m threshold. Segment C has revenue of $8m and profit of $1m against a $1.22m threshold, so it falls below all three tests.

  1. AA, B and C
  2. BA and B onlyCorrect
  3. CA, B, C, D and E
  4. DA only

Explanation

Revenue threshold is 10% of $100m = $10m: A and B pass; C (8), D (6), E (4) fail. Profit total is 12.2; 10% is 1.22: A and B pass, C (1) fails. Assets follow revenue, so only A and B pass. Therefore only A and B are reportable on the thresholds alone, ignoring the 75% test.

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