The Standard requires an entity to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, financial information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. The Standard requires an entity to report a measure of operating segment profit or loss and of segment assets. It also requires an entity to report a measure of segment liabilities and particular income and expense items if such measures are regularly provided to the chief operating decision maker. It requires reconciliations of total reportable segment revenues, total profit or loss, total assets, liabilities and other amounts disclosed for reportable segments to corresponding amounts in the entity’s financial statements The Standard requires an entity to report information about the revenues derived from its products or services (or groups of similar products and services), about the countries in which it earns revenues and holds assets, and about major customers, regardless of whether that information is used by management in making operating decisions. However, the Standard does not require an entity to report information that is not prepared for internal use if the necessary information is not available and the cost to develop it would be excessive. The Standard also requires an entity to give descriptive information about the way the operating segments were determined, the products and services provided by the segments, differences between the measurements used in reporting segment information and those used in the entity’s financial statements, and changes in the measurement of segment amounts from period to period.
Difference Between AS 17 and Ind AS 108
Recommended Articles First and foremost, two sets of segments are identified – one based on products and services(business segment) and the other based on geographical area. Then, one set is classified as primary segment and the other as secondary segment, depending on which set reflects the sources of risks and returns affecting the entity. Further Ind AS 108 does not require differenciation between primary and secondary segment. Operating segment can either be based on products and services(business segment) or on geographical basis. In case of business segment: Disclosures are required when an entity receives more than 10% of its revenue from a single customer. In such instances, an entity must disclose:
The fact that it receives > 10% of revenue from a single customer, the total amount of revenue earned from each such customer and the name of the operating segment that reports the revenue.
In case of Geographical Segment:
Revenue earned from customers in the country of domicile Revenue earned from customers in foreign country Non-current assets in country of domicile Non-current assets in all foreign countries
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