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CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Ananya Ltd. has a primary reportable segment Alpha with revenue Rs 80 lakh, segment expenses Rs 62 lakh (including Rs 4 lakh depreciation) and interest expense Rs 3 lakh related to segment borrowings. Corporate head office expenses of Rs 5 lakh are not allocable to segments. Under AS 17, what is the segment result for Alpha?

Segment result is segment revenue minus segment expense, excluding interest expense and unallocable corporate costs. So Alpha's result is Rs 80 lakh minus Rs 62 lakh, which is Rs 18 lakh. Interest and head office expenses are reconciled separately at enterprise level.

  1. ARs 18 lakhCorrect
  2. BRs 13 lakh
  3. CRs 15 lakh
  4. DRs 10 lakh

Explanation

Segment result is segment revenue less segment expenses, before interest expense and unallocable corporate expenses. 80 - 62 = 18 lakh. Deducting interest (15) or head office expenses (13) is wrong for AS 17.

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