Five of eight internally reported operating segments of Rollins Company qualify under the standards set by FASB 131 (ASC 280)for segment reporting.However,the five identified segments do not meet the 75 percent revenue test.FASB 131 (ASC 280)prescribes that management:
A)subdivide segments until there are at least 10 reportable segments.
B)consolidate the remaining operating segments and include them under an "all other" category.
C)select additional operating segments until the 75% threshold is met.
D)include the heading "corporate headquarters" as an operating segment.

Question

Quizplus · Accepted Answer

Management should select additional operating segments until the 75% threshold is met to ensure that the reportable segments cover at least 75% of the company's total revenue.

Five of Eight Internally Reported Operating Segments of Rollins Company