Skip to content

CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Kaveri Industries Ltd has five business segments. Total segment revenue including inter-segment sales is ₹1,000 lakh, and total segment assets are ₹1,000 lakh. Segment data (₹ in lakh): A: revenue 400, result +60, assets 500 B: revenue 300, result +40, assets 300 C: revenue 150, result -30, assets 100 D: revenue 100, result +10, assets 60 E: revenue 50, result +5, assets 40 Assuming the 75% external revenue test is already satisfied, how many segments are reportable under the 10% thresholds of AS 17?

Four segments are reportable: A, B, C and D. A segment needs to meet only one of the 10% tests. D meets the revenue test, with revenue exactly 10% of total, although it fails the result and asset tests. E fails all three tests.

  1. A4Correct
  2. B3
  3. C5
  4. D2

Explanation

Revenue test: 10% of 1,000 = 100, so A, B, C and D qualify (D is exactly 10%). Result test: total profit is 115 and total loss is 30, so the threshold is 10% of the greater, 115, which is 11.5; A, B and C qualify. Asset test: 10% is 100, so A, B and C qualify. D qualifies through the revenue test alone, because meeting any one test is enough. E fails all three tests (5%, 5 < 11.5, 4%). So 4 segments are reportable; counting 3 results from applying only the result test.

Did you get it right without looking?

One question tells you little. A timed set on AS 17 Segment Reporting shows your real accuracy, how long you take and where you lose marks.

Practise AS 17 Segment ReportingFree diagnostic mock

More AS 17 Segment Reporting questions