AS17SegmentReporting

Whyisitrequired?
Foraclearerunderstandingoftheperformancesofsegments.
Scope:
For

GeneralPurposeFinancialStatementsor
ConsolidatedFinancialStatements.

IfFinancialreportcontainsboth,thenonthebasisofCFS.
Nomenclature:
1BusinessSegment

Distinguishablecomponentofanenterprise,engagedinprovidinganindividualproduct
orserviceoragroupofrelatedproductorservices

and

subjecttorisksandreturnsexclusiveofothersegments.

Factorstobeconsideredforclassifyingrelatedproductsandservices

Natureofproductsandservices
Natureofprocessing
Classofcustomers
Distributionsystem
Natureofdomain(Banking,Insuranceetc)

2GeographicalSegment

Distinguishablecomponentofanenterprise,engagedinprovidinganindividualproduct
orserviceoragroupofrelatedproductorserviceswithina specificenvironment

and

subjecttorisksandreturnsexclusiveofothersegments.

FactorstobeconsideredinidentifyingGeographicalSegment

Similarityofeconomicandpoliticalscene
Proximity

3EnterpriseRevenue

Salesrevenuefromexternalcustomers(excludesinternalsegmenttransfer)

4SegmentRevenue

Includesrevenueof

Specificsegment
Reasonablyallocablepartofenterpriserevenue
Internalsegmenttransfer

Ifprimarilyafinancialsegment

Includes

Interestanddividendincome
Interestanddividendincomeofadvancesandloanstoothersegments
Gainsonsalesofinvestment
Gainsonwritingoffofdebts

Excludes

Extraordinaryitems(asperAS5)

NonoperationalInterestanddividendincome

NonoperationalInterestanddividendincomeofadvancesandloanstoother
segments

NonoperationalGainsonsalesofinvestment

NonoperationalGainsonwritingoffofdebts

5SegmentExpense

Includesexpenseof

SpecificSegment

Reasonablyallocablepartofenterpriseexpense

Reasonablyallocableoperationallyreleventpartofadministrative,head
officeandotherexpensesincurredonbehalfofthesegment

Ifprimarilyafinancialsegment

Includes

Interestexpense
Interestexpenseonadvancesandloansfromothersegments
Lossesonsalesofinvestment
Lossesonwritingoffofdebts

Excludes

Extraordinaryitems(asperAS5)
NonoperationalInterestexpense
NonoperationalInterestexpenseonadvancesandloansfromothersegments
NonoperationalLossesonsalesofinvestment
NonoperationalLossesonwritingoffofdebts
Interestexpenseonoverdraftsandoperatingliabilitiesofaspecificsegment
Incometaxexpense
Administrative,headofficeandotherexpensesrelevanttowholeenterprise

6SegmentResult

SegmentRevenue(minus)SegmentExpense

7SegmentAssets

Specificorreasonablyallocableoperatingassetsemployedbysegmentin
operatingactivities

Ifsegmentresultincludesinterestordividendincomethensegmentassets
includerelatedreceivables,loans,investmentsorotherinterestordividend

generatingassets

Incometaxassetsareexcludedinanycase
Relevantallowancesandprovisionsaredeductedbeforebalancesheetreporting

8SegmentLiabilities

Specificorreasonablyallocableoperatingliabilitiesofsegmentfrom
operatingactivities

Ifsegmentresultincludesinterestexpensethensegmentassetsinclude
relatedinterestbearingliabilities

Incometaxliabilitiesareexcludedinanycase

9SegmentAccountingPolicies

policies.

Accountingpoliciesapplicabletoenterpriseaswellasspecificsegment

Howtoascertainifasegmentisreportable?

Basedon

a)Revenue

Revenueofsegment(externalcustomers+internaltransfers)is
atleast10%ofallsegments.

b)ProfitorLoss

Segmentresult(higherof(combinedresultofallsegmentsinprofits
orloss))isatleast10%ofallsegments.

c)Segmentassets

Segmentassetsareatleast10%ofallsegments.

Ifthesegmentbecomesreportableinanyoneoftheaboveteststhen
itbecomesareportablesegment.

d)Preceedingdata

Ifsegmentreportableinpreviousperiod,thenreportableincurrent
periodalso.

e)TotalExternalrevenue

Ifexternalrevenueofreportablesegmentslessthan75%oftotal
enterpriserevenueadditionalsegmentstobeidentifiedasreportableuntil75%of

externalrevenueisincluded.

f)ManagementChoice

Howtodetermineprimaryandsecondaryreportingformats?
Dominantsource

ReportingFormat

Primary

Secondary
Differencesinproducts
andservices

Business

Geographic
DifferencesinGeographic
locations

Both

Geographic

Business

Geographic

Business

Neither

Dependingrisksandreturnsmorerelevanttothesegment