Archive | Segment Reporting

Selecting an Appropriate Basis of Segmentation

In this article we will discuss about selecting an appropriate basis of segmentation. The appropriateness of a basis of segmentation should be decided in terms of its relevance to external users for decision-making purposes. Generally speaking, that segment is material for users which show significantly different rates of profitability, diverse degrees of risk or varying […]

Segment Reporting: Concept, Benefits and Limitations

In this article we will discuss about Segment Reporting:- 1. Concept of Segment Reporting 2. Benefits of Segment Reporting 3. Limitations 4. Difficulties. Concept of Segment Reporting: The basic goal of a country’s economy is to maximise the economic and social welfare of its citizens through an efficient allocation of resources. In developing economies, chartered […]

Disclosure in Company’s Annual Reports of Diversified Companies

The following items of information have been proposed for disclosure in published annual reports of diversified companies: Item # 1. Segment Revenue: According to AS-17 Segment Reporting: Segment revenues are the aggregate of: (i) The portion of enterprise revenue that is directly attributable to a segment, (ii) The relevant portion of enterprise revenue that can […]

Segmental Disclosures by Indian Companies

In this article we will discuss about the segmental disclosures by Indian companies. The Indian Companies Act, 1956 has provision for disclosures of some segmental (product) information in published annual reports such as sales (quantity and values), production (quantity and values), stocks (quantity and values), and purchases (quantity and values). Besides, information about licensed capacity […]

Guidelines for Identifying Reportable Segments

AS-17 Segment Reporting issued by ASB of ICAI has the following guidelines on identifying reportable segments: Guideline # 1. Primary and Secondary Segment Reporting Formats: 1. The dominant source and nature of risks and returns of an enterprise should govern whether its primary segment reporting format will be business segments or geographical segments. If the […]

Bases of Segmentation of a Diversified Company

A diversified company, generally speaking, can be dissected according to one or more of the following bases: Base # 1. Organisational Division: The term ‘division’ has different meanings in different companies. Most commonly, the term ‘division’ refers to the use of company operating structure or organisation charts as a basis for segmenting operations into reporting […]

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