QUESTION 1:

RyrieTavishBhd has four operating segments. The following information relates to the year ended 30 April 2014:

Additional information:

1. Segments Diamond and Gold earned RM5,600,000 and RM3,800,000, respectively, from sales to other operating segments. The remaining operating segments have no internal sales.

2. The company identifies reportable segments based on revenue.

Required:

a. Describe briefly any two (2) factors to be considered in determining whether or not products and services are related for the purpose of identifying operating business segments.

b. Categorise the four operating segments into reportable and non-reportable segments in accordance to MFRS 8 Operating Segments. Show all workings.

QUESTION 2:

BabyAlike Skin Care Bhd has three operating segments, Cosmetics, Health Foods and Hygiene. The results for each segment and for the head office for the year ended 31 December 2011 are as follows:

The profit generated by the headquarters is only incidental to the activities of the company as a whole.

During the year 2011, the company received interest income of RM3.75 million and paid interest expense of RM2.5 million. The tax expense for the year was RM50 million.

Required:

With reference to FRS 8, Operating Segments, explain the quantitative threshold tests that BabyAlike Skin Care Bhd may apply to identify the reportable segments for year 2011. Use the information given above to illustrate your answer.

QUESTION 3

Worldwide is a multinational company that has business activities located in three sectors - Europe, North America and Asia.

The company also has a head office that procures all necessary finance for the company's activities. The operating costs for 2012 relating to the head office was RM10,000,000.

The results and other relevant information for the three sectors for the year ended 31 December 2012 are as follows:

Additional information:

i. Investment income for the year was RM6,000,000 and finance cost was RM25,000,000. These cannot be allocated.
ii. Income tax expense for the year was RM28,000,000.
iii. Other corporate assets amounted to RM56,000,000 and the related depreciation for the year is RM4,000,000.
iv. Other corporate liabilities amounted to RM193,000,000.

Required:

a) Identify the reportable segments. The company uses ‘Revenue' to identify its reportable segments.

b) Prepare a segment report for Worldwide for the year ended 31 December 2012 that complies with FRS 8 Operating Segments.

QUESTION 4

An entity has the following operating segments for the year ended 30 June 2013:

The entity uses 10% revenue test to identify reportable segments.

Required:

a. Apart from the 10% threshold test, MFRS 8 Operating Segments also requires reportable segments to meet the 75% total revenue test. Explain briefly the 75% total revenue test.

b. Based on the above information, prepare a segmental report for the entity for the year ended 30 June 2013.

QUESTION 5

Pan Malaysian Airlines Bhd operates predominantly in two business segments: airline operations and cargo services. Other business segments include catering, engineering, computerized reservation services, trucking and warehousing services, retailing of goods, terminal charges and tour and travel related activities, none of which are of a sufficient size to be reported separately. As at 31 December 2011, you are given the following information:

Other additional information:

Required:

Prepare the segmental report to be disclosed in the notes to the accounts of Pan Malaysian Airlines Bhd as at 31 December 2011 showing all relevant information.