Skip to content

CA Intermediate · Advanced Accounting · AS 17 Segment Reporting

Nirmal Ltd. has a segment result and assets as follows (Rs lakh): X assets 50, Y assets 30, Z assets 12, W assets 8. Total assets of all segments are Rs 100 lakh. Z and W fail the revenue and result tests. Which statement is correct for the asset test?

Z is reportable because its assets of Rs 12 lakh are 12% of total segment assets of Rs 100 lakh, above the 10% limit. W at 8% fails. A segment needs to satisfy only one of the revenue, result or asset tests to be reportable.

  1. AZ is reportable because its assets are 12% of total, which exceeds 10%Correct
  2. BZ and W are both reportable
  3. CNeither Z nor W is reportable
  4. DOnly W is reportable

Explanation

The asset test requires segment assets to be 10% or more of total assets of all segments. Z has 12/100 = 12%, so it qualifies; W has 8% and does not. Meeting any one of the three tests is enough.

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