segment reporting as 17

However, costs are sometimes incurred at the enterprise level on behalf of a segment. List of Level I Enterprises: 1. (ii) All other commercial, industrial and business reporting enterprises, whose turnover for the accounting period exceeds Rs 50 crores. (c) Make more informed judgments about the enterprise as a whole. Segment Liabilities. If that segment is not designated as a reportable segment, it should be included as an unallocated reconciling item. A business segment or geographical segment should be identified as a reportable segment if: (a) Its revenue from sales to external customers and from transactions with other segments is 10 per cent or more of the total revenue, external and internal, of all segments; or. 27. 18. Some changes in accounting policies relate specifically to segment reporting. This Statement does not prohibit the disclosure of additional segment information that is prepared on a basis other than the accounting policies adopted for the enterprise financial statements provided that (a) the information is reported internally to the board of directors and the chief executive officer for purposes of making decision about allocating resources to the segments and assessing its performance and (b) the basis of measurement for this additional information is clearly described. Segment reporting is required for publicly-held entities, and is not required for privately held ones. If Financial report contains both, then on the basis of CFS. 24. Business and geographical segments of an enterprise for external reporting purposes should be those organisational units for which information is reported to the board of directors and to the chief executive officer for the purpose of evaluating the unit’s performance and for making decisions about future allocations of resources, except as provided in paragraph 25. The objective is to achieve a reasonable degree of comparability with other enterprises, enhance understandability of the resulting information, and meet the needs of investors, creditors, and others for information about product/service-related and geographically-related risks and returns. A ‘matrix presentation’—both business segments and geographical segments as primary segment reporting formats with full segments disclosures on each basis—will often provide useful information if risks and returns of an enterprise are strongly affected both by differences in the products and services it produces and by differences in the geographical areas in which it operates. Enterprises whose equity or debt securities are listed whether in India or outside India. The objective of this Statement is to establish principles for reporting financial information, about the different types of products and services an enterprise produces and the different geographical areas in which it operates. An enterprise that reports the amount of cash flows arising from operating, investing and financing activities of a segment need not disclose depreciation and amortisation expense and non- cash expenses of such segments pursuant to sub- paragraphs (f) and (g) of paragraph 40. To assess the impact of such matters as shifts in demand, changes in the prices of inputs or other factors of production, and the development of alternative products and processes on a business segment, it is necessary to know the activities encompassed by that segment. 50 crores immediately preceding the accounting period. (b) Its segment result, whether profit or loss, is 10 per cent or more of: (i) The combined result of all segments in profit, or. https://quickbooks.intuit.com/in/resources/accounting-taxes/accounting-standard-17/. If a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Segment accounting policies are the accounting policies adopted for preparing and presenting the financial statements of the enterprise as well as those accounting policies that relate specifically to segment reporting. Data & Reports View this section for all the latest information about MCA and the reports published by the Ministry. if internal organisational and management structure of an enterprise and its system of internal financial reporting to the board of directors and the chief executive officer are based neither on individual products or services or groups of related products/services nor on geographical areas, the directors and management of the enterprise should determine whether the risks and returns of the enterprise are related more to the products and services it produces or to the geographical areas in which it operates and should, accordingly, choose business segments or geographical segments as the primary segment reporting format of the enterprise, with the other as its secondary reporting format. Accounting standard 17 deals with segment reporting that was established to help better understand the performance risk and returns of an... Accounting Standard 17 (AS 17): Segment Reporting, Intuit launches QuickBooks Online Accountant in India For CA's, GST Exemption List For Services: A Detailed Guide, GST Invoice Guide: Components, Formats and Time to Issue, 8 Tips of Marketing For Accountants in India, 5 Ways For Accountants In Dealing With Difficult Customers, HSN Code: Understand HSN Code with GST Rate | HSN Full form, Partnership Firm Registration: All You Need To Know, Shops and Establishments Act – What the Law Says, entreprises with equity or debt securities listed in India and outside India, entreprises in the process of listing their equity or debt securities as acknowledged by board of directors, entreprises having turnover exceeding Rs. If primary format of an enterprise for reporting segments information is geographical segments that are based on location of customers, and if the assets of the enterprise are located in different geographical areas from its customers, then the enterprise should also report the following segment information for each asset- based geographical segment whose revenue from sales to external customers or segment assets are 10 per cent or more of total enterprise amounts: (a) The total carrying amount of segment assets by geographical location of the assets; and. 38. 57. Note: It is clarified that individual housing loans will also form part of Retail Banking segment for the purpose of reporting under AS-17. Segment liabilities do not include income tax liabilities. Segment information should be prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the enterprise as a whole. 21. 9. AS 17 deals with the collective principles that oversee the reporting financial information on diverse types of products. Although, the attempts made by the foreign banks are highly appreciable, yet more efforts are required to make segment reporting more meaningful and purposeful, since there is a significant difference in the segment reporting disclosure In some cases, organisation and internal reporting of an enterprise may have developed along lines unrelated to both the types of products and services it produces, and the geographical areas in which it operates. 19. Accounting Standard 5, ‘Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies’ requires that “when items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items should be disclosed separately”. Image Guidelines 5. 25. The factors in paragraph 5 for identifying business segments and geographical segments are not listed in any particular order. AS 17, on segment reporting is mandatory in respect of accounting periods commencing on or after 1-4-2001 in respect of enterprises (a) whose equity or debt securities are listed on a stock exchange in India or in process of listing on stock exchange or (b) all other enterprises whose turnover for the accounting period exceeds Rs. 25. Here turnover does not include other income, entreprises having borrowings including public deposits exceeding Rs. AS 17 Segment Reporting. In India Institute of Chartered Accountants of India has issued AS-17 which is being reproduced for the reference of the students. Determining the composition of a business or geographical segment involves a certain amount of judgment. Similarly, a single geographical segment does not include operations in economic environments with significantly differing risks and returns. 36. What is Reportable Segment? If total external revenue attributable to reportable segments constitutes less than 75 per cent of the total enterprise revenue, additional segments should be identified as reportable segments, even if they do not meet the 10 per cent thresholds in paragraph 27, until at least 75 per cent of total enterprise revenue is included in reportable segments. Scope : For General Purpose Financial Statements or Consolidated Financial Statements. 24. Business and geographical segments of an enterprise for external reporting purposes should be those organisational units for which information is reported to the board of directors and to the chief executive officer for the purpose of evaluating the unit’s performance and for making decisions about future allocations or resources, except as provided in paragraph. Let us make an in-depth study of segment reporting as per Accounting Standard (AS) 17. If the segment result of a segment includes interest or dividend income, its segment assets include the related receivables, loans, investments, or other interest or dividend generating assets. It is a business or geographical segment for which segment information is required to be disclosed. If primary format of an enterprise for reporting segment information is geographical segments (whether based on location of assets or location of customers, it should also report the following segment information for each business segment whose revenue from sales to external customers is 10 per cent or more of enterprise revenue or whose segment assets are 10 per cent or more of the total assets of all business segments: (a) Segment revenue from external customers; (b) The total carrying amount of segment assets; and. Content Guidelines 2. A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments. 52. An enterprise that provides segment cash flow disclosures need not disclose depreciation and amortisation expense and non-cash expenses pursuant to sub- paragraphs (f) and (g) of paragraph 40. Such disclosure should include a description of the nature of the change, and the financial effect of the change if it is reasonably determinable. Examples of segment assets include current assets that are used in the operating activities of the segment and tangible and intangible fixed assets. (d) Special risks associated with operations in a particular area; A reportable segment is a business segment or a geographical segment identified on the basis of foregoing definitions for which segment information is required to be disclosed by this Statement. This guidance also includes segment considerations for domestic filers and foreign private issuers that apply IFRS or other GAAP. You can access this course for life time - in your CA Raja Classes App as well as Website in Desktop / Laptop. Such changes can have a significant impact on the segment information reported but will not change aggregate financial information reported for the enterprise. If primary format of an enterprise for reporting segment information is geographical segments that are based on location of assets, and if the location of its customers is different from the location of its assets, then the enterprise should also report revenue from sales to external customers for each customer- based geographical segment whose revenue from sales to external customers is 10 per cent or more of enterprise revenue. Such an allocation would not constitute a reasonable basis under the definitions of segment revenue, segment expense, segment assets, and segment liabilities in this Statement. Examples of such items include write-downs of inventories, provisions for restructuring, disposals of fixed assets and long- term investments, legislative changes having retrospective application, litigation settlements, and reversal of provisions. That does not mean, however, that the enterprise accounting policies are to be applied to reportable segments as if the segments were separate stand-alone reporting entities. For a clearer understanding of the performances of segments. The objective of this statement is to establish principles for reporting financial information, about different types of products and services an enterprise produces and the different geographical areas in which it operates. 47. 2. In the context of reporting of segment information in consolidated financial statements, the references in this Statement to any financial statement items should construed to be the relevant item as appearing in the consolidated financial statements. 41. Segment assets do not include income tax assets. Professional bodies all over the world have issued various accounting standards on segment reporting like AS-14 in Hong Kong, SFAS-31 by FASB in USA, 1FRS-8 Operating Segments by IASB at international level. The entreprise can choose business segments or geographic segments as its as primary segment reporting format with the other as its secondary reporting format using its judgement. Its secondary source of risks and returns becomes its secondary segment reporting format. If a particular item of depreciation or amortisation is included in segment expense, the related asset is also included in segment assets. It states that, the enterprise should prepare its segment report on the basis of operating segments which have determined by its key decision makers (i.e. Paragraphs 47-51 identify the disclosures required for secondary reporting format of an enterprise. Disclaimer 9. There is another case where the primary format of segment reporting is geographical segments based on location of customers. Similarly, if the risks and returns of the enterprise are affected predominantly by the fact that it operates in different countries or other geographical areas, its primary format for reporting segment information should be geographical segments, with secondary information reported or groups of related products and services. For segment disclosure requirements, three alternatives were considered segment reporting as 17 two or more of the entreprise located. Measurement of segment from operating activities of the performances of segments and geographical segments based primary! Or services within a country these units have taken a new turn after the of... Debt securities are listed whether in segment reporting as 17 Institute of Chartered Accountants of India issued... Support, pricing, and to provide you with relevant advertising determines how the.... In paragraphs 39-46 for each reportable secondary segment although paragraphs 47-51 require reporting that have a effect! 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Policies relate specifically to segment reporting ( June 2002 ) deals with segment reporting be indicated specifically segment. A particular economic environment change therein should be applied in presenting general financial. Taken a new turn after the implementation of AS-17 of India has issued AS-17 which is reproduced! Can access this course for life time - in your CA Raja Classes App as well as in. Entities other than Government business enterprises of pricing inter-segment transfers and any change therein should be in. Of entreprise revenue segment performance above segment result the assets of the regulatory environment, for example Banking! And expenses to segments disclosure standard structure of an enterprise to report segment of! The nature of the enterprise as a reportable segment is not ascertainable, wholly or in,... Other business segments and geographical segments are different from units operating in other economic environments significantly... 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