CA Inter P1 · Chapter 2 · Question 5 of 12
Case: Tejas Industries Ltd has five business segments, all revenue being from external customers: Segment P: revenue ₹4,20,000; result profit ₹80,000; segment assets ₹5,00,000 Segment Q: revenue ₹3,10,000; result profit ₹60,000; segment assets ₹3,00,000 Segment R: revenue ₹90,000; result loss ₹40,000; segment assets ₹80,000 Segment S: revenue ₹70,000; result profit ₹6,000; segment assets ₹60,000 Segment T: revenue ₹60,000; result profit ₹4,000; segment assets ₹1,10,000 Applying the 10% thresholds of AS 17, which segments are reportable?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) P, Q, R and T
Explanation
Total revenue is 9,50,000, so the revenue threshold is 95,000: only P and Q pass. For results, the greater of total profits (1,50,000) and total losses (40,000) is 1,50,000, so the threshold is 15,000; R's loss of 40,000 qualifies. Total assets are 10,50,000, so the threshold is 1,05,000; T's assets of 1,10,000 qualify. S fails all three tests. The reportable segments P, Q, R and T cover 92.6% of external revenue, which exceeds 75%, so no further segment needs to be added.
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