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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Nimbus Power Ltd's CODM receives monthly packs for a 'Renewables' component and a 'Trading' component. The Renewables component earns revenue from external customers and has a segment manager accountable to the CODM. Trading is a small activity that has no separate manager and whose results are reviewed by the CODM only within the Renewables pack. The company also has a pension trust for retired employees, whose financials are reviewed by the CODM separately. Which statement is correct under Ind AS 108?

Renewables can be an operating segment, Trading is not separately one, and the pension trust is excluded. Ind AS 108 states post-employment benefit plans are not operating segments regardless of review, while Trading lacks separate discrete information reviewed by the CODM.

  1. ARenewables can be an operating segment; Trading is not separately one, as no discrete information is reviewed for it; the pension trust is not one under any circumstancesCorrect
  2. BRenewables, Trading and the pension trust are all operating segments
  3. COnly the pension trust is an operating segment as it is separately reviewed
  4. DRenewables is not a segment because segments require three separate managers

Explanation

The characteristics of an operating segment centre on the CODM regularly reviewing its results and discrete information being available. Trading is reviewed only within the Renewables pack, so it is not separate. Ind AS 108 explicitly says post-employment benefit plans are not operating segments, even if reviewed separately by the CODM.

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