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Hello Tutor,
Could you kindly explain this paragraph to me?
”At least 75% of the entity’s external revenue must be included in reportable
segments. Other segments should be identified as reportable segments until
75% of external revenue is reported.”The 10% test is based on TOTAL revenue. (EXTERNAL and INTER-COMPANY).
It is possible that the 10% test does not pick up enough (75%) EXTERNAL revenue. In which case the 75% test comes into play.
If all segments satisfying 10% criteria have been disclosed & do not amount to
75% of total external revenue => additional operating segments should be
disclosed until 75% level is met
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