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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Meridian Group Ltd has these components: A, a mining unit earning external sales with a manager reporting to the CODM; B, a treasury department earning only incidental interest, not reviewed as a segment; C, the company's gratuity trust (a post-employment benefit plan) whose performance is reviewed by the CODM; D, a retail unit with separate discrete financial information reviewed regularly by the CODM and with its own segment manager. Which components can be operating segments under Ind AS 108?

Only the mining unit A and the retail unit D can be operating segments. The treasury department earns only incidental revenue, and the gratuity trust is a post-employment benefit plan, which Ind AS 108 expressly says is not an operating segment regardless of CODM review.

  1. AA, B and D
  2. BA and D onlyCorrect
  3. CA, C and D
  4. DA, B, C and D

Explanation

A and D engage in business activities, have discrete information reviewed by the CODM and have responsible managers, so they can be operating segments. B earns only incidental revenue like a functional department and is not a segment. C is a post-employment benefit plan, which Ind AS 108 expressly excludes even if the CODM reviews it. Hence A and D only.

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