PQR Ltd. has identified 4 Operating Segments for which revenue data is given below: External Sales (₹ ) Internal Sales (₹ ) Total (₹ ) Segment L…

Threshold amount is 19,20,000 (₹ 1,92,00,000 × 10%). Segment L exceeds the quantitative threshold (₹ 55,00,000 > ₹ 19,20,000) and hence reportable segment. Segment O exceeds the quantitative threshold (₹ 1,05,00,000 > ₹ 19,20,000) and hence reportable segment. Segment M & N do not meet the quantitative threshold amount and may not be classified as reportable segment. However, the total external revenue generated by these two segments L & O represent only 74.39% [( ₹ 61,00,000 / ₹ 82,00,000) x 100] of the entity's total external revenue. If the total external revenue reported by operating segments constitutes less than 75% of the entity total revenue, additional operating segments should be identified as reportable segments until at least 75% of the revenue is included in reportable segments. In case of PQR Ltd., it is given that Segment N is a new business unit and management expect this segment to make a significant contribution to external revenue in coming years. In accordance with the requirement of Ind AS 108, PQR Ltd. designates this start-up segment N as a reportable segment, making the total external revenue attributable to reportable segments 95.12% [( ₹ 78,00,000/ 82,00,000) x 100] of total entity revenues. In this situation, Segments L, N and O will be reportable segments and Segment M will be shown as other segment. Alternatively, Segment M can be considered as a reportable segment as well as it meets the definition of operating segment. If Segment M is considered as reportable segment: External revenue reported = ₹ 52,00,000 + 4,00,000 + 9,00,000 = ₹ 65,00,000 % of Total External Revenue = ₹ 65,00,000 / ₹ 82,00,000 = 79.27% Accordingly, Segments L, M and O will be reportable segments and Segment N will be shown as other segment.