Consider the following list of operating segments and segment results for the current reporting period relating to Legolas Ltd,and answer the question below. $$\begin{array} { | l | r | }
\hline \text { Operating segment } & \begin{array} { l }
\text { Segment assets } \
\text { profit (loss) in \$ }
\end{array} \
\hline \text { Paper products } & 317000 \
\hline \text { Office products } & ( 150000 ) \
\hline \text { Publishing } & ? \
\hline \text { Multimedia } & ( 880000 )\
\hline \text { Other operations } & 75000\
\hline
\end{array}$$ What is the minimum loss (rounded to the nearest $1000)that the publishing segment could have made for that segment to be considered a reportable segment according to AASB 8?
A) ($39 000)
B) ($114 000)
C) ($103 000)
D) ($142 000)

Question

Consider the following list of operating segments and segment results for the current reporting period relating to Legolas Ltd,and answer the question below. $$\begin{array} { | l | r | } 
\hline \text { Operating segment } & \begin{array} { l } 
\text { Segment assets } \
\text { profit (loss) in \$ }
\end{array} \
\hline \text { Paper products } & 317000 \
\hline \text { Office products } & ( 150000 ) \
\hline \text { Publishing } & ? \
\hline \text { Multimedia } &  ( 880000 )\
\hline \text { Other operations } & 75000\
\hline
\end{array}$$ What is the minimum loss (rounded to the nearest $1000)that the publishing segment could have made for that segment to be considered a reportable segment according to AASB 8?
A) ($39 000)
B) ($114 000)
C) ($103 000)
D) ($142 000)

Quizplus · Accepted Answer

According to AASB 8, a segment is considered reportable if it meets any of the quantitative thresholds: (1) its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10% or more of the combined revenue, internal and external, of all operating segments; (2) the absolute amount of its reported profit or loss is 10% or more of the greater, in absolute amount, of (a) the combined reported profit of all operating segments that did not report a loss and (b) the combined reported loss of all operating segments that reported a loss; (3) its assets are 10% or more of the combined assets of all operating segments. Given the information, the publishing segment would need to have a loss that is at least 10% of the greatest absolute amount of total reported losses to be considered reportable. The multimedia segment has the largest loss at $880,000, so 10% of this is $88,000. However, since the choices provided do not match this calculation directly and considering the context of the question, the closest higher option provided is ($114,000), which would ensure the segment meets the threshold for consideration under the profit or loss criteria.

Consider the Following List of Operating Segments and Segment Results