Taft Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:

	Spain				Italy				Greece
Sales	$	185,000			$	610,000			$	460,000
Intersegment transfers		0				100,200				70,000
Operating expenses		182,000				216,000				200,000
Interest expense		20,000				33,000				23,000
Income taxes		71,000				23,000				38,000
Long-lived assets		100,000				160,000				110,000

The companys domestic (U.S.) operations reported the following information for the current year:

Sales to unaffiliated customers	$	4,540,000
Intersegment transfers		447,000
Operating expenses		2,430,000
Interest expense		146,000
Income taxes		839,000
Long-lived assets		2,220,000

Taft has adopted the following criteria for determining the materiality of an individual foreign country:

1. Calculate sales to unaffiliated customers within a country and as a percent of the consolidated sales.

2. Calculate long-lived assets within a country and as a percentage of the long-lived assets.

3. Apply Tafts materiality tests to identify the countries which are 10 percent or more of consolidated sales or consolidated long-lived assets to be reported separately.

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27 Revenue test 28 29 Spain 185000 Italy 610000 30 31 Particulars Sales Intersegment Sales Total of Revenue Segment Greece 460000 70000 530000 0 100200 710200 32 185000 33 34 Perform Revenue Test 35 36 Particulars 37 38 Spain Italy Greece Total Revenues 185,000 710,200 530,000 1,425,200 % 12.98% 49.83% 37.19% 100.00% 39 40 41 Segments with more than 10% are reportable.Hence all three countries are reportable separately. 42 43 44 45 46 Particulars United States Spain Italy Greece Total Revenues 4,540,000 185,000 710,200 530,000 5,965,200 % 76.11% 3.10% 11.91% 8.88% 100.00% 47 48 49 50 51 Calculate long-lived assets within a country and as a percentage of the long-lived assets. 52 53 54 55 56 57 Particulars Long lived Assets % United States 2,220,000 85.71% Spain 100,000 3.86% Italy 160,000 6.18% Greece 110,000 4.25% Total 2,590,000 100.00% 59 60 Apply Taft's materiality tests to identify the countries which are 10 percent or more of consolidated 61 sales or consolidated long-lived assets to be reported separately. 62 63 Spain, Italy and Greece 58 64