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CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Himalaya Group has seven business segments with the following results (₹ lakh): P +150, Q +70, R +40, U +20, S −60, T −25 and V −15. Applying only the segment result test of AS 17 (10% of the greater, in absolute amount, of combined profit of all profit-making segments or combined loss of all loss-making segments), how many segments are reportable?

Four segments are reportable. The greater of combined profits (₹280 lakh) and combined losses (₹100 lakh) is ₹280 lakh, so the threshold is ₹28 lakh. Only segments P, Q, R and S have an absolute result of at least ₹28 lakh.

  1. A7
  2. B6
  3. C5
  4. D4Correct

Explanation

Combined profit = 150+70+40+20 = ₹280 lakh; combined loss = 60+25+15 = ₹100 lakh. The greater is ₹280 lakh, so the threshold is ₹28 lakh. Absolute results of P (150), Q (70), R (40) and S (60) meet it; U (20), T (25) and V (15) do not, giving 4. Using the loss base (threshold ₹10 lakh) would wrongly make all 7 reportable.

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