Which of the following is a quantitative threshold for identifying a reportable segment under ASC 280?

Answer options:

Segment liabilities are 10% or more of total consolidated liabilities.

Segment equity is 10% or more of total consolidated equity.

Segment assets are 10% or more of the combined assets of all operating segments.

Segment revenue is 5% or more of total consolidated revenue.

How to approach this question

Memorize the 10% tests: 1) Revenue (Internal + External), 2) Absolute Profit/Loss, 3) Assets. Note: Liabilities and Equity are NOT tests.

Full Answer

C.Segment assets are 10% or more of the combined assets of all operating segments.✓ Correct

ASC 280-10-50-10 establishes three 10% quantitative thresholds. An operating segment is reportable if: 1) Reported revenue is >= 10% of combined revenue; 2) Absolute reported profit or loss is >= 10% of the greater, in absolute amount, of combined profit or combined loss; 3) Assets are >= 10% of combined assets.

Common mistakes

Confusing 10% with 5% (which is for major funds in GASB); assuming liabilities are tested.

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