Home › CA Final › financialreporting › operatingsegments › An entity's operations are spread across many re…
An entity's operations are spread across many regions, each contributing less than 5% to external revenue. No region or product individually meets any 10% threshold. Under Ind AS 108, the minimum number of segments that must be reported separately to satisfy the 75% rule is approximately:
ANone — if no segment meets 10%, the entity may report as a single segment
BTen — per the practical-limit guideline for reportable segments
CFifteen — so that reportable segments' external revenue reaches at least 75% of total external revenue
DFive — the largest five segments by external revenue
Answer & Solution
Correct answer: C. Fifteen — so that reportable segments' external revenue reaches at least 75% of total external revenue
Para 15 mandates that reportable segments' external revenue ≥ 75% of total. With each segment contributing 5%, the minimum count is 75 ÷ 5 = 15 segments, even though none meets the individual 10% tests. The practical-limit guideline (around 10 segments) is a soft consideration, but the 75% floor is hard.
Related questions
An entity measures pension expense for its segments on a CASH-PAYMENT basis (the basis useA finance segment derives a MAJORITY of its revenues from interest, and the CODM relies prAn entity changes its internal organisation, causing the composition of its REPORTABLE SEGA segment was reportable in the prior period but does NOT meet quantitative thresholds in A transport company runs three segments: Local Route (contracted by the local transport auInd AS 108 applies a 10% test on REPORTED PROFIT OR LOSS. The denominator (i.e., the base X Ltd. operates in both product lines (A and B, worldwide) and geographical areas, with maIf a parent within the scope of Ind AS 108 publishes BOTH its consolidated and its separat