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CA Intermediate · Advanced Accounting · Applicability of Accounting Standards

Ravi Pharma Ltd has equity shares listed on a recognised stock exchange. It is not an SMC. Its management says it will skip AS 17 Segment Reporting because the company operates in a single state. Which view is correct?

AS 17 applies to Ravi Pharma Ltd because it is a listed company and not an SMC. Operating in a single state does not exempt it; reportable segments are determined by differing business or geographical risks and returns under the standard.

  1. AAS 17 is not applicable to any company operating in a single state
  2. BAS 17 applies to Ravi Pharma Ltd as a listed non-SMC company; the segments are determined by business and geographical risks and returns, not just by stateCorrect
  3. CAS 17 applies only to banks and insurance companies
  4. DAS 17 applies only if turnover exceeds Rs 1,000 crore

Explanation

AS 17 applies to enterprises whose equity or debt securities are listed, and non-SMCs. Ravi Pharma is listed, so AS 17 applies. Whether it has more than one reportable segment depends on differing risks and returns across business or geographical segments; operating in one state does not itself exempt it. If it truly has a single segment, it would disclose that fact, but the standard still applies.

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