The following information pertains to Freeman Corp. and its various divisions for the year ended December 31, 2020: $\begin{array}{llr}
\text {Sales to external customers. } &\$2,250,000\
\text { Intersegment sales of products similar to those sold to } &\
\text { external customers } &675,000\
\text { Interest earned onloans to other operating segments } &45,000\
\end{array}$
According to IFRS, Freeman has a reportable segment if that segment's revenue equals or exceeds

Question

The following information pertains to Freeman Corp. and its various divisions for the year ended December 31, 2020: $\begin{array}{llr}
  \text {Sales to external customers.  } &\$2,250,000\
 \text { Intersegment sales of products similar to those sold to } &\
 \text { external customers } &675,000\
 \text { Interest earned onloans to other operating segments } &45,000\
\end{array}$
 According to IFRS, Freeman has a reportable segment if that segment's revenue equals or exceeds

Quizplus · Accepted Answer

Under IFRS, a segment is reportable if its revenue, including both sales to external customers and intersegment sales, is 10% or more of the combined revenue of all segments. Here, the combined revenue is $2,250,000 (external sales) + $675,000 (intersegment sales) + $45,000 (interest), totaling $2,970,000. 10% of $2,970,000 is $297,000. However, the interest income should not be included in the calculation as it's not from sales. Therefore, the correct base for calculation is $2,250,000 + $675,000 = $2,925,000. 10% of $2,925,000 is $292,500.

The Following Information Pertains to Freeman Corp According to IFRS, Freeman Has a Reportable Segment If That