Five of eight internally reported operating segments of Rollins Company qualify under the standards set by ASC 280 for segment reporting.However,the five identified segments do not meet the 75 percent revenue test.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

ASC 280 requires that if the total external revenue reported by the operating segments constitutes less than 75% of the entire company's revenue, additional segments must be identified as reportable segments until the 75% threshold is met.

Five of Eight Internally Reported Operating Segments of Rollins Company