As 17

1. ACCOUNTING STANDARD - 17
SEGMENT REPORTING
J.P., KAPUR & UBERAI

2. OBJECTIVEOBJECTIVE
Reporting financial information about:
uDifferent types of products and services an
enterprise produces, and
uThe different geographical areas in which it
operates.
J.P., KAPUR & UBERAI

3. BENEFIT TO USERSBENEFIT TO USERS
uBetter understanding of the performance of the
enterprise;
uAssess the risks and returns of the enterprise.
u Make more informed judgements about the
enterprise as a whole.
J.P., KAPUR & UBERAI

4. APLICABILITYAPLICABILITY
Accounting period commencing on or after April
1, 2001 in respect of following enterprises:
u LISTED ENTERPRISES or those which are in
the process of Listing
u Enterprises with annual turnover more than
Rs. 50 crores.
J.P., KAPUR & UBERAI

5. DEFINITIONSDEFINITIONS

What is a BUSINESS SEGMENT ?
uDistinguishable component of an enterprise.
uEngaged in providing an individual product or
service.
uSubject to risks and returns different from other
business segments.
J.P., KAPUR & UBERAI

6. DEFINITIONSDEFINITIONS

What is A GEOGRAPHICAL SEGMENT ?
uDistinguishable component of an enterprise
uEngaged in providing products or services within a
particular economic environment
uThat is subject to risks and returns that are different
from those of components operating in other
economic environments
J.P., KAPUR & UBERAI

7. IDENTIFICATION OF IDENTIFICATION OF
REPORTABLE SEGMENTREPORTABLE SEGMENT
uIts revenue from sales to external customers is 10 per
cent more of the total revenue, or
u Its segment result, whether profit or loss, is 10 per
cent or more of the combined result of all segments in
profit or loss, or
uIts segment assets are 10 per cent or more of the total
assets of all segments.
Contd….
Contd….
J.P., KAPUR & UBERAI

8. IDENTIFICATION OF IDENTIFICATION OF
REPORTABLE SEGMENTREPORTABLE SEGMENT

u The location of production or service facilities
and other assets of an enterprise;
u The location of its customers.
J.P., KAPUR & UBERAI

9. IDENTIFICATION OF IDENTIFICATION OF
REPORTABLE SEGMENTREPORTABLE SEGMENT

If total revenue attributable to all reportable segment is
less than 75% of the total enterprises revenue,
additional segments should be identified as reportable
segments, even if they do not meet the 10%
thresholds, until at least 75% of total enterprises
revenue is included in reportable segments.
J.P., KAPUR & UBERAI

10. COMPARATIVESCOMPARATIVES
If a segment is identified as a reportable segment in the
current period, preceding period segment data is
presented for comparative purpose, even if that
segment did not satisfy the 10% threshold in the
preceding period.
A segment identified as a reportable segment in the
immediately preceding period should continue to be a
reportable segment for the current period even if it
does not meet the 10% threshold.
J.P., KAPUR & UBERAI

11. Primary and Secondary Segment Primary and Secondary Segment
Reporting FormatsReporting Formats
J.P., KAPUR & UBERAI
If RISKS AND RETURNS are affected by

Differences in the Operation in different
products and services countries or
geographical areas
BUSINESS SEGMENT GEOGRAPHICAL
SEGMENT

12. J.P., KAPUR & UBERAI
Matrix presentationMatrix presentation
If the risk & return of an enterprise are equally
effected by differences in the products and services it
produces and by differences in the geographical areas
in which it operates, then the enterprise should use
BUSINESS SEGMENTS as its PRIMARY
SEGMENT reporting format and
GEOGRAPHICAL SEGMENTS as its
SECONDARY REPORTING format & full segment
disclosures is given on each basis

13. J.P., KAPUR & UBERAI
DISCLOSURESDISCLOSURES
a.Segment revenue from sales to external customers
b. Segment revenue from transactions with other
segments
c.Segment result
d.Total carrying amount of segment assets;
e.Total amount of segment liabilities;
f.Additions to tangible and intangible fixed assets;
g.Depreciation and amortisation for the period
h. Significant other non-cash expenses