Skip to content

CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Mehta Diversified Ltd. has five segments with these segment results (₹ lakh): P profit 40, Q profit 25, R loss (30), S profit 5, T loss (6). Applying only the segment result test of AS 17, how many segments are reportable?

Three segments are reportable: P, Q and R. AS 17 measures the result test against 10% of the greater of total profits (₹70 lakh) or total losses (₹36 lakh), which is ₹7 lakh. Only P, Q and R have results of at least that amount in absolute terms.

  1. A2
  2. B3Correct
  3. C4
  4. D5

Explanation

Combined profit of profitable segments is 40+25+5 = ₹70 lakh; combined loss of loss-making segments is 30+6 = ₹36 lakh. The greater in absolute terms is ₹70 lakh, so the threshold is ₹7 lakh. P (40), Q (25) and R (30 loss) meet it; S (5) and T (6) do not. Using the net result of ₹34 lakh (threshold 3.4) would wrongly qualify all five.

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