1. Following are the important Accounting Standards related with Segment
1. IFRS 8
2. INDAS 108
3. AS -17
2. Withdrawal of IAS 14
This IFRS supersedes IAS 14 Segment Reporting.
3. Differences between INDAS 108 and IFRS 8
|INDAS 108||IFRS 8|
|1.Transitional provisions have not been given||1.Transitional provisions have been given in IFRS 8|
|2.Relevant terms are Statement of profit and loss and balance sheet||2. Relevant terms are Statement of Comprehensive Income and Statement of Financial Position|
|Differences with respect to scope
3.INDAS 108 shall apply to companies to which Indian Accounting Standards notified under the Companies Act apply
|3.Paragraph 2 of IFRS 8 requires that the standard apply to :
a. the separate or individual financial statements of an entity (Subject to certain conditions) b. the consolidated financial statements of a group with a parent (Subject to certain conditions)
4. No Major differences between INDAS 108 and IFRS 8 except the above. Therefore , the following paragraphs relate to both INDAS 108 and IFRS 8 .INDAS
5. Core principle
An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
1. INDAS 108 shall apply to companies to which Indian Accounting Standards notified under the Companies Act apply
2. If an entity voluntarily discloses segment information ,it shall not describe the information as segment information
3. Segment information is required only in the consolidated financial statements
7. The entities are required to disclose information about their operating segments now the question is what is operating segment which is to be reported in the financial statements.
Reportable segments are operating segments or aggregation of operating segments that meet specified criteria
8. Important Concepts as per this standard
> Operating segment
If the answers to the all following questions are yes, then the component of an entity is known as operating entity
A. Can the component generate revenue and incur expenses from its activities?
B. Whether the component’s operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resource allocation and performance assessment?
C. Whether discrete financial information is available for the component?
If any of the answers is no ,then the component is not an operating segment.
9. Determining reportable segments
An entity must report separate information about each operating segment that:
1. Definition of operating segment is satisfied and
2. Segment total is 10% or more of total:
a. Revenue (Internal and external ) of all operating segments or
b. Profit of all segments not reporting a loss or all segments in loss if greater ,or
c. Assets of all operating segments.
Whether identified reportable segments account for 75% of the entity’s revenue?
If the answer is yes ,then Aggregate remaining segments into all other segments. ‘category’.
If the answer is no, then additional segments must be identified (even if they do not meet the 10% thresholds)
Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of this IFRS, the segments have similar economic characteristics, and the segments are similar in each of the following respects:
(a) the nature of the products and services;
(b) the nature of the production processes;
(c) the type or class of customer for their products and services;
(d) the methods used to distribute their products or provide their services; and
(e) if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities.
An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates .
Following information to be disclosed
1. General Information
2. Reported segment profit or loss
3.Reported Segment assets
4.Reported Segment liabilities
5. Basis of measurement
6. Reconciliations of the totals of segment revenues ,reported segment profit or loss, segment assets ,segment liabilities and other material segment items to corresponding entity amounts
12. Entity –Wide disclosures
All entities should disclose information about the following only if it is not provided as part of the reportable segment information required by this Ind AS. This includes those entities having single reportable segment.
1. Products and services
2. Geographical areas
3. Major customers