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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Kaveri Healthcare Ltd runs a hospital chain and also a staff post-employment benefit plan, a gratuity fund trust, whose investment performance is separately reviewed by the board for compliance. A trainee proposes reporting the gratuity plan as an operating segment since it has separate financial information. What is the correct position under Ind AS 108?

The gratuity plan is not an operating segment. Ind AS 108 expressly states that an entity's post-employment benefit plans are not operating segments, so separate financial information, board review or size thresholds cannot turn it into one.

  1. AIt is an operating segment if separate financial information is available
  2. BIt is an operating segment if the board reviews its performance
  3. CIt is an operating segment only if its assets exceed 10% of combined assets
  4. DIt is not an operating segment, because post-employment benefit plans are excludedCorrect

Explanation

Ind AS 108 states that for its purposes an entity's post-employment benefit plans are not operating segments. Availability of separate information or board review does not change this. The 10% threshold applies only to reportable segments among operating segments, so it is irrelevant.

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