Skip to content

CMA Final · Corporate Financial Reporting · Operating Segments (Ind AS 108)

Kaveri Textiles Ltd's CODM receives two sets of reports: one by product lines (cotton, silk, synthetics) and another by geographical regions. Each set has discrete financial information, and managers are responsible for components in both. Under Ind AS 108, what is used to determine which set constitutes the operating segments?

Operating segments are identified using other factors: the nature of each component's business activities, the existence of managers responsible for them, and the information presented to the board of directors. Ind AS 108 points to a single set of components, not both sets and not the larger-revenue set.

  1. AOther factors, including the nature of the business activities of each component, the existence of managers responsible for them, and information presented to the board of directorsCorrect
  2. BWhichever set shows the higher total revenue
  3. CBoth sets must be reported as operating segments in full
  4. DThe set that the statutory auditor prefers

Explanation

Paragraph 8 says that where the CODM uses more than one set of segment information, other factors identify a single set of components as operating segments. These include the nature of activities, managers responsible and information presented to the board. Revenue size and auditor preference are not criteria.

Did you get it right without looking?

One question tells you little. A timed set on Operating Segments (Ind AS 108) shows your real accuracy, how long you take and where you lose marks.

Practise Operating Segments (Ind AS 108)Free diagnostic mock

More Operating Segments (Ind AS 108) questions