ACCOUNTING STANDARD 17 (Segment Reporting)
Contents <ul><li>Introduction </li></ul><ul><li>Objectives </li></ul><ul><li>Enterprises Covered </li></ul><ul><li>Key Def...
Introduction <ul><li>Also known as Segment Reporting. </li></ul><ul><li>Issued by the Council of the Institute of Chartere...
Objectives <ul><ul><li>To inform about the different types of products and services of an enterprise and the different geo...
Enterprises Covered <ul><li>Enterprises whose equity or debt securities are listed on the stock exchange. </li></ul><ul><l...
Enterprises Covered <ul><li>Insurance businesses. </li></ul><ul><li>All enterprises whose turnover exceeds Rs. 50 crore. <...
New Enterprises Covered <ul><li>As per R.B.I Guidelines, the following sectors should also disclose their Segment Report: ...
Key Definitions <ul><li>Business Segment </li></ul><ul><ul><li>Distinguishable component providing a product or service. <...
 
Key Definitions <ul><li>Geographical segment:   </li></ul><ul><ul><li>Distinguishable component providing product/service ...
 
Key Definitions <ul><li>Reportable segment  :  </li></ul><ul><li>Identification of Business segment or Geographical segmen...
Key Definitions <ul><li>Enterprise revenue  : </li></ul><ul><li>Revenue from sales to external customers. </li></ul>
Key Definitions <ul><li>Segment revenue : </li></ul><ul><li>Revenue from transactions with other segments of the enterpris...
 
Key Definitions <ul><li>Segment result </li></ul><ul><li>Difference between segment revenue and segment expenses. </li></ul>
 
Key Definitions <ul><li>Segment assets </li></ul><ul><ul><li>Employed by a segment in its operating activities  </li></ul>...
 
Key Definitions <ul><li>Segment liabilities </li></ul><ul><ul><li>Result from the operating activities of a segment  </li>...
 
Identifying Reportable Segments <ul><li>Primary & Secondary Segment Reporting Formats </li></ul><ul><li>Differentiation on...
Identifying Reportable Segments <ul><li>Matrix Approach </li></ul><ul><li>If risks and returns of an enterprise are strong...
Reportable Segments <ul><li>A business segment or geographical segment should be identified as a reportable segment if: </...
Segment Accounting Policies <ul><li>Segment accounting policies   </li></ul><ul><li>This policies help in identifying  -  ...
Disclosure <ul><li>An enterprise should disclose the following for each reportable segment: </li></ul><ul><li>segment reve...
Disclosure <ul><li>Secondary Segment Information </li></ul><ul><ul><li>If primary format for reporting is a  business segm...
Disclosure <ul><li>If primary format for reporting is geographical segments, it should report the following information : ...
Case Study <ul><li>Segment Reporting: Objective versus Reality  </li></ul>Source: Business Line’s Survey of BL-250 compani...
<ul><li>Thank You </li></ul>
Upcoming SlideShare
Loading in …5
×

Accounting standard 17

14,490 views
13,974 views

Published on

4 Comments
15 Likes
Statistics
Notes
  • please mail it to me at gaya3.sagi@gmail.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • please send me this ppt to my mail id rishikumarkj@gmail
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • this is superb
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • please sent me this ppt on my mail id diana13692@yahoo.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
14,490
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
4
Likes
15
Embeds 0
No embeds

No notes for slide

Accounting standard 17

  1. 1. ACCOUNTING STANDARD 17 (Segment Reporting)
  2. 2. Contents <ul><li>Introduction </li></ul><ul><li>Objectives </li></ul><ul><li>Enterprises Covered </li></ul><ul><li>Key Definitions </li></ul><ul><li>Primary & Secondary Segments </li></ul><ul><li>Reportable Segments </li></ul><ul><li>Segment Accounting Policies </li></ul><ul><li>Disclosures </li></ul><ul><li>Case Study </li></ul>
  3. 3. Introduction <ul><li>Also known as Segment Reporting. </li></ul><ul><li>Issued by the Council of the Institute of Chartered Accountants of India. </li></ul><ul><li>Commencing on or after 1.4.2001. </li></ul>
  4. 4. Objectives <ul><ul><li>To inform about the different types of products and services of an enterprise and the different geographical areas in which it operates. </li></ul></ul><ul><ul><li>To better understand the performance of the enterprise </li></ul></ul><ul><ul><li>To better assess the risks and returns of the enterprise, </li></ul></ul><ul><ul><li>To throw more light on merger and acquisition activity. </li></ul></ul>
  5. 5. Enterprises Covered <ul><li>Enterprises whose equity or debt securities are listed on the stock exchange. </li></ul><ul><li>Enterprises which are in the process of listing their equity or debt securities. </li></ul><ul><li>Financial institutions. </li></ul><ul><li>Banks. </li></ul>
  6. 6. Enterprises Covered <ul><li>Insurance businesses. </li></ul><ul><li>All enterprises whose turnover exceeds Rs. 50 crore. </li></ul><ul><li>All enterprises having borrowings including public deposits, in excess of Rs. 10 crore. </li></ul><ul><li>Holding and subsidiary enterprises of any one of the above. </li></ul>
  7. 7. New Enterprises Covered <ul><li>As per R.B.I Guidelines, the following sectors should also disclose their Segment Report: </li></ul><ul><li>Retail Banking </li></ul><ul><li>Corporate Banking </li></ul>
  8. 8. Key Definitions <ul><li>Business Segment </li></ul><ul><ul><li>Distinguishable component providing a product or service. </li></ul></ul><ul><ul><li>Subject to risks and returns different from other segments. </li></ul></ul><ul><li>Business Segments can be identified on the basis of </li></ul><ul><ul><li>Nature of products/services, </li></ul></ul><ul><ul><li>Nature of processes, </li></ul></ul><ul><ul><li>Nature of customers, </li></ul></ul><ul><ul><li>Distribution processes, </li></ul></ul><ul><ul><li>If applicable, the nature of the regulatory environment. </li></ul></ul>
  9. 10. Key Definitions <ul><li>Geographical segment: </li></ul><ul><ul><li>Distinguishable component providing product/service in a particular economic environment. </li></ul></ul><ul><ul><li>Subject to risks and returns different from other segments. </li></ul></ul><ul><ul><li>This segment can be further divided based on - </li></ul></ul><ul><ul><ul><li>Location of production facilities. </li></ul></ul></ul><ul><ul><ul><li>Location of consumers. </li></ul></ul></ul>
  10. 12. Key Definitions <ul><li>Reportable segment : </li></ul><ul><li>Identification of Business segment or Geographical segment </li></ul>
  11. 13. Key Definitions <ul><li>Enterprise revenue : </li></ul><ul><li>Revenue from sales to external customers. </li></ul>
  12. 14. Key Definitions <ul><li>Segment revenue : </li></ul><ul><li>Revenue from transactions with other segments of the enterprise. </li></ul>
  13. 16. Key Definitions <ul><li>Segment result </li></ul><ul><li>Difference between segment revenue and segment expenses. </li></ul>
  14. 18. Key Definitions <ul><li>Segment assets </li></ul><ul><ul><li>Employed by a segment in its operating activities </li></ul></ul>
  15. 20. Key Definitions <ul><li>Segment liabilities </li></ul><ul><ul><li>Result from the operating activities of a segment </li></ul></ul>
  16. 22. Identifying Reportable Segments <ul><li>Primary & Secondary Segment Reporting Formats </li></ul><ul><li>Differentiation on the basis of Differences in risks & returns </li></ul><ul><li>For Example:- </li></ul><ul><ul><ul><li>If risks n returns of Big Bazaar are affected predominantly by the change in differences of products & services, then its primary format would be Business segment. Similarly if risks & returns of Big Bazaar are affected by the fact that it operates in different countries or other geographical areas, its primary format should be geographical segments. </li></ul></ul></ul>
  17. 23. Identifying Reportable Segments <ul><li>Matrix Approach </li></ul><ul><li>If risks and returns of an enterprise are strongly affected both by differences in the products and </li></ul><ul><li>services it produces and by differences in the geographical areas in which it operates. </li></ul>
  18. 24. Reportable Segments <ul><li>A business segment or geographical segment should be identified as a reportable segment if: </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>its segment result, whether profit or loss, is 10 per cent or more of </li></ul></ul><ul><ul><ul><ul><li>the combined result of all segments in profit, or </li></ul></ul></ul></ul><ul><ul><ul><ul><li>the combined result of all segments in loss, whichever is greater in absolute amount; or </li></ul></ul></ul></ul><ul><ul><li>its segment assets are 10 per cent or more of the total assets of all segments </li></ul></ul>
  19. 25. Segment Accounting Policies <ul><li>Segment accounting policies </li></ul><ul><li>This policies help in identifying - </li></ul><ul><ul><li>Segments, </li></ul></ul><ul><ul><li>Method of pricing inter-segment transfers, </li></ul></ul><ul><ul><li>Basis for allocating revenues and expenses to segments. </li></ul></ul>
  20. 26. Disclosure <ul><li>An enterprise should disclose the following for each reportable segment: </li></ul><ul><li>segment revenue, classified into segment revenue from </li></ul><ul><ul><ul><li>Sales to external customers; </li></ul></ul></ul><ul><ul><ul><li>Transactions with other segments; </li></ul></ul></ul><ul><ul><li>segment result; </li></ul></ul><ul><ul><li>total amount of segment assets; </li></ul></ul><ul><ul><li>total amount of segment liabilities; </li></ul></ul><ul><ul><li>total cost incurred to acquire segment assets; </li></ul></ul><ul><ul><li>total amount of depreciation on segment assets; </li></ul></ul><ul><ul><li>total amount of other significant non-cash expenses. </li></ul></ul>
  21. 27. Disclosure <ul><li>Secondary Segment Information </li></ul><ul><ul><li>If primary format for reporting is a business segment , it should report the following information : </li></ul></ul><ul><ul><ul><li>segment revenue from external customers classified on the basis of their location. </li></ul></ul></ul><ul><ul><ul><li>the total amount of segment assets based on the geographical location of assets. </li></ul></ul></ul><ul><ul><ul><li>the total cost incurred to acquire segment assets for each geographical segment. </li></ul></ul></ul>
  22. 28. Disclosure <ul><li>If primary format for reporting is geographical segments, it should report the following information : </li></ul><ul><ul><li>Revenue from sales to external customers for each customer-based geographical segment. </li></ul></ul><ul><ul><li>Changes In Accounting Policies Adopted For Segment Reporting. </li></ul></ul><ul><ul><li>The Types Of Products And Services Included In Each Reported Business Segment. </li></ul></ul><ul><ul><li>The Composition Of Each Reported Geographical Segment. </li></ul></ul>
  23. 29. Case Study <ul><li>Segment Reporting: Objective versus Reality </li></ul>Source: Business Line’s Survey of BL-250 companies.
  24. 30. <ul><li>Thank You </li></ul>

×