Assuming the three business units below are operating segments and all revenue earned are from external customers, in which of the following scenarios does Bromwell Ltd need to identify another reportable segment to be disclosed? $46050075017106302340\begin{array}{|l|r|r|r|r|r|r|}\hline \begin{array}{l}\text { Revenue } \\\text { in } \$ 000\end{array} & \text { Toby } & \text { Bailey } & \text { Ron } & \text { Total operating segments } & \begin{array}{c}\text { Other business } \\\text { units }\end{array} &{\begin{array}{c}\text { Total } \\\text { Bromwell } \\\text { Ltd }\end{array}} \\\hline \text { I. } & 150 & 320 & 640 & 1110 & 500 & 1610 \\\hline \text { II. } & 220 & 280 & 550 & 1050 & 350 & 1400 \\\hline \text { III. } & 460 & 500 & 750 & 1710 & 630 & 2340 \\\hline\end{array}$

A) I only.
B) I and II.
C) I and III.
D) II and III.

Question

Assuming the three business units below are operating segments and all revenue earned are from external customers, in which of the following scenarios does Bromwell Ltd need to identify another reportable segment to be disclosed?

46050075017106302340\begin{array}{|l|r|r|r|r|r|r|}\hline \begin{array}{l}\text { Revenue } \\\text { in } \$ 000\end{array} & \text { Toby } & \text { Bailey } & \text { Ron } & \text { Total operating segments } & \begin{array}{c}\text { Other business } \\\text { units }\end{array} &{\begin{array}{c}\text { Total } \\\text { Bromwell } \\\text { Ltd }\end{array}} \\\hline \text { I. } & 150 & 320 & 640 & 1110 & 500 & 1610 \\\hline \text { II. } & 220 & 280 & 550 & 1050 & 350 & 1400 \\\hline \text { III. } & 460 & 500 & 750 & 1710 & 630 & 2340 \\\hline\end{array}

A) I only.
B) I and II.
C) I and III.
D) II and III.

Richard Roberts · Accepted Answer

Final Answer : C, Explanation :  The 75% revenue threshold test requires that the total external revenue reported by operating segments should collectively account for at least 75% of the company's total revenue. In scenarios I and III, the total operating segments' revenue does not meet this threshold when compared to Bromwell Ltd's total revenue, indicating the need to identify additional reportable segments.

Definitions

Learning Objectives

Learning Objectives

Related questions