An enterprise has eight reporting segments.Five segments show an operating profit and three segments show an operating loss.In determining which segments are classified as reporting segments under the operating profits test,which of the following statements is correct?
A)The test value for all segments is 10% of consolidated net profit.
B)The test value for profitable segments is 10% or more of those segments reporting a profit,and the test value for loss segments is 10% or more of those segments reporting a loss.
C)The test value for loss segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting losses,or (b)10% of consolidated net profit.
D)The test value for all segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting profits,or (b)the absolute value of the sum of those segments reporting losses.

Question

Quizplus · Accepted Answer

The correct answer is D because it accurately reflects the approach to determining significant segments by considering both the absolute value of profits and losses across all segments, ensuring a comprehensive evaluation of segment significance relative to the overall financial performance of the enterprise.

An Enterprise Has Eight Reporting Segments