My IAS home page
My IAS home page
to this page
International Accounting Standard 14: Segment Reporting
International Accounting standard 14 is concerned with the segmentation of accounting information. That is, we take the overall accounting information for an organisation as a whole and then split out the various departments, areas, branches and aggregate them in such a way that we can publish sales, cost of sales and other accounting information in terms of the major areas of the organisation.
The solutions to the questions on this page are available to anyone who asks: just email me and I'll send them by return ... don't forget to tell me what you want!! Whilst I have prepared all of the solutions to these questions, I have used IAS materials for some of them and I can't put them here because to do so could infringe the IASB's copyright.
Along with the other pages in this series, the layout of this page is that I have worked my way through the Standard from start to finish exploring the most important paragraphs as I go. It will be most useful if you have the Standard in front of you as you work your way through this page.
1 (a) what is the objective of IAS 14?
2 To which enterprises does IAS 14 apply?
3 Define each of the key terms from IAS 14 that follow
a Operating activities
4 Define each of the key terms from IAS 14 that follow
a Business segment
5 How do we determine whether products or services are related, as per the definition of a business segment in paragraph 9 of IAS 14?
6 Provide examples of related products or services from an enterprise with which you are familiar.
7 According to IAS 14, what factors should we consider in identifying geographical segments?
8 We know from the definition of segment revenue what it includes; but what must segment revenue not include, according to IAS 14?
9 What, according to IAS 14, must segment expenses specifically exclude?
10 Describe the "management approach" to segment definition.
11 Distinguish between primary and secondary segments in the context of IAS 14.
12 IAS 14, paragraphs 27 and 29, discusses a "matrix presentation" of accounting information. What is meant by a "matrix presentation" here?
13 Under what conditions should the segments of an organisation be based according to IAS 14?
14 Fill in the gaps from paragraph 35 from IAS 14:
A business segment or geographical segment should be identified as a reportable segment if a majority of its revenue is earned from sales to external customers and:
(a) __________ 10% __________; or
15 How should we segment our organisation if its individual segments are too small, in terms of the thresholds given in IAS 14?
16 What is the significance in terms of segment reporting of the value of 75% of total consolidated or enterprise revenue?
17 (a) what is meant by the phrase vertically integrated activities in
paragraph 39 of IAS 14? Illustrate your answer with an example.
18 (a) Enterprises are free to choose the accounting policies on which
segment reports are based: True or False?
19 Summarise the requirements of paragraphs 51 to 67 of IAS 14 in terms of the Primary Reporting Format of Segment Reports.
20 Summarise the requirements of paragraphs 68 to 72 of IAS 14 in terms of the Secondary Reporting Format of Segment Reports.
21 Summarise the provisions of paragraph 74 of IAS 14.
22 How should changes in segment accounting policies be dealt with?
23 How must an enterprise reconcile segment information to consolidated or enterprise information?
Questions devised and prepared by
© Duncan Williamson
© Webmaster Duncan Williamson 2002