A public company is preparing its annual financial statements. The company operates in two distinct business segments: Segment A and Segment B. Segment A reports revenue of $100 million, Segment B reports revenue of $80 million, and unallocated corporate revenue is $20 million. The company's total assets are $500 million, with Segment A having $200 million, Segment B having $150 million, and $150 million unallocated corporate assets. Total profit for Segment A is $15 million, and for Segment B is $10 million, with a corporate loss of $5 million. What is the minimum combined identifiable revenue for the reportable segments to meet the 10% revenue test under ASC 280, Segment Reporting?

Correct answer: D. $18 million

The 10% revenue test for identifying a reportable segment is based on the combined revenue of all internal and external sales of all operating segments. Total revenue for all operating segments is Segment A ($100 million) + Segment B ($80 million) + Unallocated Corporate Revenue ($20 million) = $200 million. Therefore, the minimum combined identifiable revenue for reportable segments is 10% of $200 million = $20 million. Wait, the question asks for the minimum combined identifiable revenue for *the* reportable segments, not the threshold. The threshold is 10% of total *external and internal* revenue of all operating segments. Total revenue is $100M + $80M + $20M = $200M. 10% of this is $20M. However, the rule is applied to each segment individually. The question asks for MINIMUM combined identifiable revenue FOR THE REPORTABLE SEGMENTS. This implies that we are looking for the threshold for a single segment to be reportable. A segment is reportable if its revenue (external + internal) is 10% or more of the combined revenue of all operating segments. The combined revenue of all operating segments is the sum of Segment A's revenue ($100M) and Segment B's revenue ($80M) and the unallocated corporate revenue ($20M), totaling $200M. Therefore, 10% of this total is $20M. This means any segment with revenue of $20M or more is reportable. The question asks for the minimum *combined* identifiable revenue for *the* reportable segments. This is a tricky wording. It does not ask for the threshold for *a* segment, but for the *combined* revenue. This implies the 75% overall test. However, looking at the options, it seems to refer to the individual 10% test. Let's re-evaluate the question. 'What is the minimum combined identifiable revenue for the reportable segments to meet the 10% revenue test'. This is asking for the 10% threshold. The threshold is 10% of the combined revenue of ALL operating segments, which is $100M + $80M = $180M (unallocated corporate revenue is typically not part of operating segment revenue for this test, but total entity revenue for the 75% rule). So, $180M * 10% = $18M. This is the threshold for a single segment to be reportable. If the question implies the 75% rule, it would be different. Given the options, $18M is derived from 10% of the sum of Segment A and B's revenue.