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CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Kaveri Foods Ltd. has total enterprise external revenue of ₹1,000 lakh. After applying the 10% tests of AS 17, the identified reportable segments together account for external revenue of ₹680 lakh. What is the minimum additional external revenue that must be brought into reportable segments by identifying further segments?

At least ₹70 lakh more must be included. AS 17 requires reportable segments to cover at least 75% of enterprise external revenue, which is ₹750 lakh here. Since ₹680 lakh is already covered, further segments must be added until another ₹70 lakh of external revenue is included.

  1. A₹70 lakhCorrect
  2. B₹75 lakh
  3. C₹250 lakh
  4. D₹320 lakh

Explanation

AS 17 requires the total external revenue of reportable segments to be at least 75% of total enterprise revenue. 75% of ₹1,000 lakh is ₹750 lakh. Since ₹680 lakh is reported, at least ₹70 lakh more must come from additional segments even if they fall below 10%. ₹320 lakh is wrong because it is the entire unreported revenue.

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