An entity shall Disclose information to enable user of its financial statement to evaluate. The nature and financial effects of the business activities in which it engages and the economics environment in which it operates.

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Corporate Reporting
Practices
I N D A S 1 0 8 O p e ra t i n g S e g m e n t s
Pooja Agrawal

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Operating Segments
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• An operating segments is a component of an entity:
a) That engages in business activities from which it may earn
revenues and expenses (including revenues and expenses relating
to transactions with other component of the same entity.
b) Whose operating results are regularly reviewed by the entity’s
chief operating decision maker to make decisions about resources
to be allocated to the segments are assess its performance, and
c) For which discrete financial information is available.

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Chief Operating Decision Maker(CODM)
• CODM is a function not a destination
• CODM can be an individual or a group of
individuals.
• CODM functions are-
Allocates the resources of an entity
Access the performance of the operating
segments of the entity
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Identify the CODM
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• Management committee-of
Board of directors
 Chief executive officer
Chief financial officer
The board of directors

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Objectives
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• The reader of financial statements should understand the nature
and financial effects of various activities of the company.

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More features on segments
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• A segments depends on internal management reporting patterns
• Segments are reported in terms of products, services, regions,
major customers etc.
• The chief decision maker review segments for performance and
allocation of funds.

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Disclosure 1
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Disclose the following segmental information:
• Operating revenues
• Operating costs
• Assets
• Liabilities
• Reconcile all the above to the totals on financial statements.

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Disclosure 2 information about p&L , assets and liabilities
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For each reporting segments entity shall report (if reviewed by
CODM or otherwise information is provided to CODM, even if not
included in measures of p&L ):
Revenue from external customers
Interest revenue and interest expenses
Depreciation and amortization
Material items of income and expenses
Income tax expenses
Material non cash items other than depreciation and amortization

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Total thresholds
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• If after segmentation total segmental revenues , operating costs ,
assets and liabilities do not reach 75% each of the company’s total
, then additional segments should be reported to reach the 75%
level.
• As a reconciling items , group all other segments

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ENTITY WIDE DISCLOSURES
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All entities subject to this IFRS including Entities that have a single
reporting segment shall provide Information about ::
• Products and Services
• Geographical Areas
• Major Customers
The amounts reported shall be based on the financial information
that is used to produce the entity’s financial statements.
If Any Information is Not Available and Cost to develop it would be
excessive, the fact should be disclosed.

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INFORMATION ABOUT PRODUCTS & SERVICES
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Revenues from External Customers for each product & services (or
group of products and services).

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INFORMATION ABOUT GEOGRAPHICAL AREAS
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• Revenues from External Customers &
• Non-current Assets (other than Financial Instruments, Deferred Tax
Assets and Rights under Insurance Contracts)
i. Attributed to the Entity’s country of Domicile
ii. Attributed to the all Foreign Countries from which the Entity
derives Revenue or holds Assets.
If revenues from External Customers or Assets attributed to an
Individual Foreign Country are Material, the same shall be disclosed
separately.

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INFORMATION ABOUT MAJOR CUSTOMERS
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 Extent of its Reliance on Major Customers
If Revenues from transaction with single external customer amount to
10% or more of the Entity’s Revenue, the Entity shall Disclose:
 the Fact;
the total amount of Revenues from each such Customer;
 the Identity of the Segment(s) reporting such Revenue
Need NOT Disclose – Identity of the Customer
A group of Entities known to the Reporting Entity to be under common
control shall be considered a single customer.
Government (and entities known to the Reporting Entity to be under
the control of that Government shall be considered a single customer.

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The End
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