Final answer:
The question deals with reportable operating segments in a company, which are significant enough to require separate disclosure in the company's financial reports. Five out of eight operating segments in the scenario exceed the quantitative thresholds for reporting, controlling 70 percent of total consolidated sales to external customers.
Step-by-step explanation:
The question pertains to operating segments reporting within a company. An operating segment is a component of a company that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and assess performance.
Companies with multiple operating segments must determine which segments are reportable according to specific quantitative thresholds outlined by financial reporting standards. For instance, if a segment’s reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 percent or more of the combined revenue, internal and external, of all operating segments, it will be deemed reportable.
In the scenario provided, five of the eight operating segments surpass the quantitative thresholds, commanding 70 percent of the company's consolidated sales to outside customers. This implies that these segments are significant enough to require separate disclosure in the company's financial reports. The remaining segments may be considered too small for separate reporting based on the guidelines set by financial reporting standards such as the International Financial Reporting Standards (IFRS) or the Generally Accepted Accounting Principles (GAAP).