Question

A segment is separately reportable if its total revenues (both internal and external) are equal to at least 10% of an entity's combined revenue of all reported operating segments (both internal and external).

True or false

Answer 1

True, a segment is separately reportable if its total revenues reach at least 10% of the combined revenue of all reported operating segments for an entity, according to financial reporting standards.

Step-by-step explanation:

The statement is true. A segment is considered separately reportable if its total revenues, from both internal and external sources, are equal to or exceed 10% of the combined revenue of all operating segments for an entity. This is in accordance with financial reporting standards that aim to provide transparency and detailed insight into the financial performance of different parts of a business.

It's important to note that not just revenues but also assets and the result can determine reportable segments if they reach the 10% threshold. Companies are required to disclose financial information about their reportable segments to help investors and other stakeholders make more informed decisions. Additionally, such standards ensure that the financial statements accurately reflect the company's operations and performance.