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Accounting Standard (AS) 17(issued 2000)
Segment Reporting
Contents
OBJECTIVE
SCOPE Paragraphs 1-4
DEFINITIONS 5-18
IDENTIFYING REPORTABLE SEGMENTS 19-32
Primary and Secondary Segment Reporting Formats 19-23
Business and Geographical Segments 24-26
Reportable Segments 27-32
SEGMENT ACCOUNTING POLICIES 33-37
DISCLOSURE 38-59
Primary Reporting Format 39-46
Secondary Segment Information 47-51
Illustrative Segment Disclosures 52
Other Disclosures 53-59
ILLUSTRATIONS
Accounting Standard (AS) 17(issued 2000)
Segment Reporting
[This Accounting Standard includes paragraphs set in bold italic type andplain type, which have equal authority. Paragraphs in bold italic typeindicate the main principles. This Accounting Standard should be read inthe context of its objective, the Preface to the Statements of AccountingStandards1 and the ‘Applicability of Accounting Standards to VariousEntities’ (See Appendix 1 to this Compendium).]
This Accounting Standard is not mandatory for Small and Medium SizedCompanies and Small and Medium Sized non-corporate entities falling inLevel II and Level III, as defined in Appendix 1 to this Compendium‘Applicability of Accounting Standards to Various Entities’. Such Entitiesare however encourged to comply with this Standard.
ObjectiveThe objective of this Standard is to establish principles for reporting financialinformation, about the different types of products and services an enterpriseproduces and the different geographical areas in which it operates. Suchinformation helps users of financial statements:
(a) better understand the performance of the enterprise;
(b) better assess the risks and returns of the enterprise; and
(c) make more informed judgements about the enterprise as a whole.
Many enterprises provide groups of products and services or operate ingeographical areas that are subject to differing rates of profitability,opportunities for growth, future prospects, and risks. Information aboutdifferent types of products and services of an enterprise and its operationsin different geographical areas - often called segment information - is relevantto assessing the risks and returns of a diversified or multi-locational enterprise1 Attention is specifically drawn to paragraph 4.3 of the Preface, according to whichAccounting Standards are intended to apply only to items which are material.
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but may not be determinable from the aggregated data. Therefore, reportingof segment information is widely regarded as necessary for meeting theneeds of users of financial statements.
Scope1. This Standard should be applied in presenting general purposefinancial statements.
2. The requirements of this Standard are also applicable in case ofconsolidated financial statements.
3. An enterprise should comply with the requirements of this Standardfully and not selectively.
4. If a single financial report contains both consolidated financialstatements and the separate financial statements of the parent, segmentinformation need be presented only on the basis of the consolidatedfinancial statements. In the context of reporting of segment informationin consolidated financial statements, the references in this Standard toany financial statement items should construed to be the relevant item asappearing in the consolidated financial statements.
Definitions5. The following terms are used in this Standard with the meaningsspecified:
5.1 A business segment is a distinguishable component of an enterprisethat is engaged in providing an individual product or service or a group ofrelated products or services and that is subject to risks and returns thatare different from those of other business segments. Factors that shouldbe considered in determining whether products or services are relatedinclude:
(a) the nature of the products or services;
(b) the nature of the production processes;
(c) the type or class of customers for the products or services;
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(d) the methods used to distribute the products or provide theservices; and
(e) if applicable, the nature of the regulatory environment, forexample, banking, insurance, or public utilities.
5.2 A geographical segment is a distinguishable component of anenterprise that is engaged in providing products or services within aparticular economic environment and that is subject to risks and returnsthat are different from those of components operating in other economicenvironments. Factors that should be considered in identifyinggeographical segments include:
(a) similarity of economic and political conditions;
(b) relationships between operations in different geographicalareas;
(c) proximity of operations;
(d) special risks associated with operations in a particular area;
(e) exchange control regulations; and
(f) the underlying currency risks.
5.3 A reportable segment is a business segment or a geographical segmentidentified on the basis of foregoing definitions for which segmentinformation is required to be disclosed by this Standard.
5.4 Enterprise revenue is revenue from sales to external customers asreported in the statement of profit and loss.
5.5 Segment revenue is the aggregate of
(i) the portion of enterprise revenue that is directly attributable toa segment,
(ii) the relevant portion of enterprise revenue that can be allocatedon a reasonable basis to a segment, and
(iii) revenue from transactions with other segments of the enterprise.
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Segment revenue does not include:
(a) extraordinary items as defined in AS 5, Net Profit or Loss forthe Period, Prior Period Items and Changes in AccountingPolicies;
(b) interest or dividend income, including interest earned onadvances or loans to other segments unless the operations ofthe segment are primarily of a financial nature; and
(c) gains on sales of investments or on extinguishment of debtunless the operations of the segment are primarily of a financialnature.
5.6 Segment expense is the aggregate of
(i) the expense resulting from the operating activities of a segmentthat is directly attributable to the segment, and
(ii) the relevant portion of enterprise expense that can be allocatedon a reasonable basis to the segment, including expense relatingto transactions with other segments of the enterprise.
Segment expense does not include:
(a) extraordinary items as defined in AS 5, Net Profit or Loss forthe Period, Prior Period Items and Changes in AccountingPolicies;
(b) interest expense, including interest incurred on advances orloans from other segments, unless the operations of the segmentare primarily of a financial nature;
Explanation:
The interest expense relating to overdrafts and other operatingliabilities identified to a particular segment are not included asa part of the segment expense unless the operations of thesegment are primarily of a financial nature or unless the interestis included as a part of the cost of inventories. In case interest
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is included as a part of the cost of inventories where it is sorequired as per AS 16, Borrowing Costs, read with AS 2,Valuation of Inventories, and those inventories are part ofsegment assets of a particular segment, such interest isconsidered as a segment expense. In this case, the amount ofsuch interest and the fact that the segment result has beenarrived at after considering such interest is disclosed by way ofa note to the segment result.
(c) losses on sales of investments or losses on extinguishment ofdebt unless the operations of the segment are primarily of afinancial nature;
(d) income tax expense; and
(e) general administrative expenses, head-office expenses, andother expenses that arise at the enterprise level and relate tothe enterprise as a whole. However, costs are sometimesincurred at the enterprise level on behalf of a segment. Suchcosts are part of segment expense if they relate to the operatingactivities of the segment and if they can be directly attributedor allocated to the segment on a reasonable basis.
5.7 Segment result is segment revenue less segment expense.
5.8 Segment assets are those operating assets that are employed by asegment in its operating activities and that either are directly attributableto the segment or can be allocated to the segment on a reasonable basis.
If the segment result of a segment includes interest or dividend income,its segment assets include the related receivables, loans, investments, orother interest or dividend generating assets.
Segment assets do not include income tax assets.
Segment assets are determined after deducting related allowances/provisions that are reported as direct offsets in the balance sheet of theenterprise.
5.9 Segment liabilities are those operating liabilities that result from the
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operating activities of a segment and that either are directly attributableto the segment or can be allocated to the segment on a reasonable basis.
If the segment result of a segment includes interest expense, its segmentliabilities include the related interest-bearing liabilities.
Segment liabilities do not include income tax liabilities.
5.10 Segment accounting policies are the accounting policies adopted forpreparing and presenting the financial statements of the enterprise aswell as those accounting policies that relate specifically to segmentreporting.
6. The factors in paragraph 5 for identifying business segments andgeographical segments are not listed in any particular order.
7. A single business segment does not include products and services withsignificantly differing risks and returns. While there may be dissimilaritieswith respect to one or several of the factors listed in the definition of businesssegment, the products and services included in a single business segmentare expected to be similar with respect to a majority of the factors.
8. Similarly, a single geographical segment does not include operations ineconomic environments with significantly differing risks and returns. Ageographical segment may be a single country, a group of two or morecountries, or a region within a country.
9. The risks and returns of an enterprise are influenced both by thegeographical location of its operations (where its products are produced orwhere its service rendering activities are based) and also by the location ofits customers (where its products are sold or services are rendered). Thedefinition allows geographical segments to be based on either:
(a) the location of production or service facilities and other assets ofan enterprise; or
(b) the location of its customers.
10. The organisational and internal reporting structure of an enterprisewill normally provide evidence of whether its dominant source ofgeographical risks results from the location of its assets (the origin of its
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sales) or the location of its customers (the destination of its sales).Accordingly, an enterprise looks to this structure to determine whether itsgeographical segments should be based on the location of its assets or onthe location of its customers.
11. Determining the composition of a business or geographical segmentinvolves a certain amount of judgement. In making that judgement,enterprise management takes into account the objective of reportingfinancial information by segment as set forth in this Standard and thequalitative characteristics of financial statements as identified in theFramework for the Preparation and Presentation of Financial Statementsissued by the Institute of Chartered Accountants of India. The qualitativecharacteristics include the relevance, reliability, and comparability over timeof financial information that is reported about the different groups of productsand services of an enterprise and about its operations in particulargeographical areas, and the usefulness of that information for assessing therisks and returns of the enterprise as a whole.
12. The predominant sources of risks affect how most enterprises areorganised and managed. Therefore, the organisational structure of anenterprise and its internal financial reporting system are normally the basisfor identifying its segments.
13. The definitions of segment revenue, segment expense, segment assetsand segment liabilities include amounts of such items that are directlyattributable to a segment and amounts of such items that can be allocated toa segment on a reasonable basis. An enterprise looks to its internal financialreporting system as the starting point for identifying those items that can bedirectly attributed, or reasonably allocated, to segments. There is thus apresumption that amounts that have been identified with segments for internalfinancial reporting purposes are directly attributable or reasonably allocableto segments for the purpose of measuring the segment revenue, segmentexpense, segment assets, and segment liabilities of reportable segments.
14. In some cases, however, a revenue, expense, asset or liability mayhave been allocated to segments for internal financial reporting purposes ona basis that is understood by enterprise management but that could be deemedarbitrary in the perception of external users of financial statements. Suchan allocation would not constitute a reasonable basis under the definitionsof segment revenue, segment expense, segment assets, and segment liabilities
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in this Standard. Conversely, an enterprise may choose not to allocate someitem of revenue, expense, asset or liability for internal financial reportingpurposes, even though a reasonable basis for doing so exists. Such an itemis allocated pursuant to the definitions of segment revenue, segment expense,segment assets, and segment liabilities in this Standard.
15. Examples of segment assets include current assets that are used in theoperating activities of the segment and tangible and intangible fixed assets.If a particular item of depreciation or amortisation is included in segmentexpense, the related asset is also included in segment assets. Segment assetsdo not include assets used for general enterprise or head-office purposes.Segment assets include operating assets shared by two or more segments ifa reasonable basis for allocation exists. Segment assets include goodwillthat is directly attributable to a segment or that can be allocated to a segmenton a reasonable basis, and segment expense includes related amortisation ofgoodwill. If segment assets have been revalued subsequent to acquisition,then the measurement of segment assets reflects those revaluations.
16. Examples of segment liabilities include trade and other payables,accrued liabilities, customer advances, product warranty provisions, andother claims relating to the provision of goods and services. Segmentliabilities do not include borrowings and other liabilities that are incurredfor financing rather than operating purposes. The liabilities of segmentswhose operations are not primarily of a financial nature do not includeborrowings and similar liabilities because segment result represents anoperating, rather than a net-of-financing, profit or loss. Further, becausedebt is often issued at the head-office level on an enterprise-wide basis, it isoften not possible to directly attribute, or reasonably allocate, the interest-bearing liabilities to segments.
17. Segment revenue, segment expense, segment assets and segmentliabilities are determined before intra-enterprise balances and intra-enterprisetransactions are eliminated as part of the process of preparation of enterprisefinancial statements, except to the extent that such intra-enterprise balancesand transactions are within a single segment.
18. While the accounting policies used in preparing and presenting thefinancial statements of the enterprise as a whole are also the fundamentalsegment accounting policies, segment accounting policies include, inaddition, policies that relate specifically to segment reporting, such as
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identification of segments, method of pricing inter-segment transfers, andbasis for allocating revenues and expenses to segments.
Identifying Reportable Segments
Primary and Secondary Segment Reporting Formats19. The dominant source and nature of risks and returns of an enterpriseshould govern whether its primary segment reporting format will be businesssegments or geographical segments. If the risks and returns of an enterpriseare affected predominantly by differences in the products and services itproduces, its primary format for reporting segment information should bebusiness segments, with secondary information reported geographically.Similarly, if the risks and returns of the enterprise are affected predominantlyby the fact that it operates in different countries or other geographical areas,its primary format for reporting segment information should be geographicalsegments, with secondary information reported for groups of related productsand services.
20. Internal organisation and management structure of an enterpriseand its system of internal financial reporting to the board of directors andthe chief executive officer should normally be the basis for identifying thepredominant source and nature of risks and differing rates of return facingthe enterprise and, therefore, for determining which reporting format isprimary and which is secondary, except as provided in sub-paragraphs(a) and (b) below:
(a) if risks and returns of an enterprise are strongly affected bothby differences in the products and services it produces and bydifferences in the geographical areas in which it operates, asevidenced by a ‘matrix approach’ to managing the companyand to reporting internally to the board of directors and thechief executive officer, then the enterprise should use businesssegments as its primary segment reporting format andgeographical segments as its secondary reporting format; and
(b) if internal organisational and management structure of anenterprise and its system of internal financial reporting to theboard of directors and the chief executive officer are basedneither on individual products or services or groups of related
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products/services nor on geographical areas, the directors andmanagement of the enterprise should determine whether therisks and returns of the enterprise are related more to theproducts and services it produces or to the geographical areasin which it operates and should, accordingly, choose businesssegments or geographical segments as the primary segmentreporting format of the enterprise, with the other as its secondaryreporting format.
21. For most enterprises, the predominant source of risks and returnsdetermines how the enterprise is organised and managed. Organisationaland management structure of an enterprise and its internal financial reportingsystem normally provide the best evidence of the predominant source ofrisks and returns of the enterprise for the purpose of its segment reporting.Therefore, except in rare circumstances, an enterprise will report segmentinformation in its financial statements on the same basis as it reports internallyto top management. Its predominant source of risks and returns becomes itsprimary segment reporting format. Its secondary source of risks and returnsbecomes its secondary segment reporting format.
22. A ‘matrix presentation’ — both business segments and geographicalsegments as primary segment reporting formats with full segment disclosureson each basis -- will often provide useful information if risks and returns ofan enterprise are strongly affected both by differences in the products andservices it produces and by differences in the geographical areas in which itoperates. This Standard does not require, but does not prohibit, a ‘matrixpresentation’.
23. In some cases, organisation and internal reporting of an enterprise mayhave developed along lines unrelated to both the types of products andservices it produces, and the geographical areas in which it operates. Insuch cases, the internally reported segment data will not meet the objectiveof this Standard. Accordingly, paragraph 20(b) requires the directors andmanagement of the enterprise to determine whether the risks and returns ofthe enterprise are more product/service driven or geographically driven andto accordingly choose business segments or geographical segments as theprimary basis of segment reporting. The objective is to achieve a reasonabledegree of comparability with other enterprises, enhance understandabilityof the resulting information, and meet the needs of investors, creditors, andothers for information about product/service-related and geographically-related risks and returns.
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Business and Geographical Segments24. Business and geographical segments of an enterprise for externalreporting purposes should be those organisational units for whichinformation is reported to the board of directors and to the chief executiveofficer for the purpose of evaluating the unit’s performance and for makingdecisions about future allocations of resources, except as provided inparagraph 25.
25. If internal organisational and management structure of an enterpriseand its system of internal financial reporting to the board of directors andthe chief executive officer are based neither on individual products orservices or groups of related products/services nor on geographical areas,paragraph 20(b) requires that the directors and management of theenterprise should choose either business segments or geographicalsegments as the primary segment reporting format of the enterprise basedon their assessment of which reflects the primary source of the risks andreturns of the enterprise, with the other as its secondary reporting format.In that case, the directors and management of the enterprise shoulddetermine its business segments and geographical segments for externalreporting purposes based on the factors in the definitions in paragraph 5of this Standard, rather than on the basis of its system of internal financialreporting to the board of directors and chief executive officer, consistentwith the following:
(a) if one or more of the segments reported internally to the directorsand management is a business segment or a geographicalsegment based on the factors in the definitions in paragraph 5but others are not, sub-paragraph (b) below should be appliedonly to those internal segments that do not meet the definitionsin paragraph 5 (that is, an internally reported segment thatmeets the definition should not be further segmented);
(b) for those segments reported internally to the directors andmanagement that do not satisfy the definitions in paragraph 5,management of the enterprise should look to the next lowerlevel of internal segmentation that reports information alongproduct and service lines or geographical lines, as appropriateunder the definitions in paragraph 5; and
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(c) if such an internally reported lower-level segment meets thedefinition of business segment or geographical segment basedon the factors in paragraph 5, the criteria in paragraph 27 foridentifying reportable segments should be applied to thatsegment.
26. Under this Standard, most enterprises will identify their business andgeographical segments as the organisational units for which information isreported to the board of the directors (particularly the non-executive directors,if any) and to the chief executive officer (the senior operating decision maker,which in some cases may be a group of several people) for the purpose ofevaluating each unit’s performance and for making decisions about futureallocations of resources. Even if an enterprise must apply paragraph 25because its internal segments are not along product/service or geographicallines, it will consider the next lower level of internal segmentation that reportsinformation along product and service lines or geographical lines ratherthan construct segments solely for external reporting purposes. This approachof looking to organisational and management structure of an enterprise andits internal financial reporting system to identify the business andgeographical segments of the enterprise for external reporting purposes issometimes called the ‘management approach’, and the organisationalcomponents for which information is reported internally are sometimes called‘operating segments’.
Reportable Segments27. A business segment or geographical segment should be identified asa reportable segment if:
(a) its revenue from sales to external customers and fromtransactions with other segments is 10 per cent or more of thetotal revenue, external and internal, of all segments; or
(b) its segment result, whether profit or loss, is 10 per cent or moreof -
(i) the combined result of all segments in profit, or
(ii) the combined result of all segments in loss,
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whichever is greater in absolute amount; or
(c) its segment assets are 10 per cent or more of the total assets ofall segments.
28. A business segment or a geographical segment which is not areportable segment as per paragraph 27, may be designated as a reportablesegment despite its size at the discretion of the management of theenterprise. If that segment is not designated as a reportable segment, itshould be included as an unallocated reconciling item.
29. If total external revenue attributable to reportable segmentsconstitutes less than 75 per cent of the total enterprise revenue, additionalsegments should be identified as reportable segments, even if they do notmeet the 10 per cent thresholds in paragraph 27, until at least 75 per centof total enterprise revenue is included in reportable segments.
30. The 10 per cent thresholds in this Standard are not intended to be aguide for determining materiality for any aspect of financial reporting otherthan identifying reportable business and geographical segments.
Illustration II attached to this Standard presents an illustration of thedetermination of reportable segments as per paragraphs 27-29.
31. A segment identified as a reportable segment in the immediatelypreceding period because it satisfied the relevant 10 per cent thresholdsshould continue to be a reportable segment for the current periodnotwithstanding that its revenue, result, and assets all no longer meet the10 per cent thresholds.
32. If a segment is identified as a reportable segment in the current periodbecause it satisfies the relevant 10 per cent thresholds, preceding-periodsegment data that is presented for comparative purposes should, unless itis impracticable to do so, be restated to reflect the newly reportable segmentas a separate segment, even if that segment did not satisfy the 10 per centthresholds in the preceding period.
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Segment Accounting Policies33. Segment information should be prepared in conformity with theaccounting policies adopted for preparing and presenting the financialstatements of the enterprise as a whole.
34. There is a presumption that the accounting policies that the directorsand management of an enterprise have chosen to use in preparing the financialstatements of the enterprise as a whole are those that the directors andmanagement believe are the most appropriate for external reporting purposes.Since the purpose of segment information is to help users of financialstatements better understand and make more informed judgements aboutthe enterprise as a whole, this Standard requires the use, in preparing segmentinformation, of the accounting policies adopted for preparing and presentingthe financial statements of the enterprise as a whole. That does not mean,however, that the enterprise accounting policies are to be applied to reportablesegments as if the segments were separate stand-alone reporting entities. Adetailed calculation done in applying a particular accounting policy at theenterprise-wide level may be allocated to segments if there is a reasonablebasis for doing so. Pension calculations, for example, often are done for anenterprise as a whole, but the enterprise-wide figures may be allocated tosegments based on salary and demographic data for the segments.
35. This Standard does not prohibit the disclosure of additional segmentinformation that is prepared on a basis other than the accounting policiesadopted for the enterprise financial statements provided that (a) theinformation is reported internally to the board of directors and the chiefexecutive officer for purposes of making decisions about allocating resourcesto the segment and assessing its performance and (b) the basis of measurementfor this additional information is clearly described.
36. Assets and liabilities that relate jointly to two or more segments shouldbe allocated to segments if, and only if, their related revenues and expensesalso are allocated to those segments.
37. The way in which asset, liability, revenue, and expense items areallocated to segments depends on such factors as the nature of thoseitems, the activities conducted by the segment, and the relativeautonomy of that segment. It is not possible or appropriate to specify asingle basis of allocation that should be adopted by all enterprises; noris it appropriate to force allocation of enterprise asset, liability, revenue,
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and expense items that relate jointly to two or more segments, if theonly basis for making those allocations is arbitrary. At the same time,the definitions of segment revenue, segment expense, segment assets,and segment liabilities are interrelated, and the resulting allocationsshould be consistent. Therefore, jointly used assets and liabilities areallocated to segments if, and only if, their related revenues and expensesalso are allocated to those segments. For example, an asset is includedin segment assets if, and only if, the related depreciation or amortisationis included in segment expense.
Disclosure38. Paragraphs 39-46 specify the disclosures required for reportablesegments for primary segment reporting format of an enterprise. Paragraphs47-51 identify the disclosures required for secondary reporting format of anenterprise. Enterprises are encouraged to make all of the primary-segmentdisclosures identified in paragraphs 39-46 for each reportable secondarysegment although paragraphs 47-51 require considerably less disclosure onthe secondary basis. Paragraphs 53-59 address several other segmentdisclosure matters. Illustration III attached to this Standard illustrates theapplication of these disclosure standards.
Explanation:
In case, by applying the definitions of ‘business segment’ and ‘geographicalsegment’, it is concluded that there is neither more than one business segmentnor more than one geographical segment, segment information as per thisStandard is not required to be disclosed. However, the fact that there is onlyone ‘business segment’ and ‘geographical segment’ is disclosed by way of anote.
Primary Reporting Format39. The disclosure requirements in paragraphs 40-46 should be appliedto each reportable segment based on primary reporting format of anenterprise.
40. An enterprise should disclose the following for each reportablesegment:
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(a) segment revenue, classified into segment revenue from sales toexternal customers and segment revenue from transactions withother segments;
(b) segment result;
(c) total carrying amount of segment assets;
(d) total amount of segment liabilities;
(e) total cost incurred during the period to acquire segment assetsthat are expected to be used during more than one period(tangible and intangible fixed assets);
(f) total amount of expense included in the segment result fordepreciation and amortisation in respect of segment assets forthe period; and
(g) total amount of significant non-cash expenses, other thandepreciation and amortisation in respect of segment assets, thatwere included in segment expense and, therefore, deducted inmeasuring segment result.
41. Paragraph 40 (b) requires an enterprise to report segment result. If anenterprise can compute segment net profit or loss or some other measure ofsegment profitability other than segment result, without arbitrary allocations,reporting of such amount(s) in addition to segment result is encouraged. Ifthat measure is prepared on a basis other than the accounting policies adoptedfor the financial statements of the enterprise, the enterprise will include inits financial statements a clear description of the basis of measurement.
42. An example of a measure of segment performance above segment resultin the statement of profit and loss is gross margin on sales. Examples ofmeasures of segment performance below segment result in the statement ofprofit and loss are profit or loss from ordinary activities (either before orafter income taxes) and net profit or loss.
43. Accounting Standard 5, ‘Net Profit or Loss for the Period, Prior PeriodItems and Changes in Accounting Policies’ requires that “when items ofincome and expense within profit or loss from ordinary activities are ofsuch size, nature or incidence that their disclosure is relevant to explain the
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performance of the enterprise for the period, the nature and amount of suchitems should be disclosed separately”. Examples of such items include write-downs of inventories, provisions for restructuring, disposals of fixed assetsand long-term investments, legislative changes having retrospectiveapplication, litigation settlements, and reversal of provisions. An enterpriseis encouraged, but not required, to disclose the nature and amount of anyitems of segment revenue and segment expense that are of such size, nature,or incidence that their disclosure is relevant to explain the performance ofthe segment for the period. Such disclosure is not intended to change theclassification of any such items of revenue or expense from ordinary toextraordinary or to change the measurement of such items. The disclosure,however, does change the level at which the significance of such items isevaluated for disclosure purposes from the enterprise level to the segmentlevel.
44. An enterprise that reports the amount of cash flows arising fromoperating, investing and financing activities of a segment need not disclosedepreciation and amortisation expense and non-cash expenses of suchsegment pursuant to sub-paragraphs (f) and (g) of paragraph 40.
45. AS 3, Cash Flow Statements, recommends that an enterprise present acash flow statement that separately reports cash flows from operating,investing and financing activities. Disclosure of information regardingoperating, investing and financing cash flows of each reportable segment isrelevant to understanding the enterprise’s overall financial position, liquidity,and cash flows. Disclosure of segment cash flow is, therefore, encouraged,though not required. An enterprise that provides segment cash flowdisclosures need not disclose depreciation and amortisation expense andnon-cash expenses pursuant to sub-paragraphs (f) and (g) of paragraph 40.
46. An enterprise should present a reconciliation between theinformation disclosed for reportable segments and the aggregatedinformation in the enterprise financial statements. In presenting thereconciliation, segment revenue should be reconciled to enterpriserevenue; segment result should be reconciled to enterprise net profit orloss; segment assets should be reconciled to enterprise assets; and segmentliabilities should be reconciled to enterprise liabilities.
Secondary Segment Information47. Paragraphs 39-46 identify the disclosure requirements to be applied to
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each reportable segment based on primary reporting format of an enterprise.Paragraphs 48-51 identify the disclosure requirements to be applied to eachreportable segment based on secondary reporting format of an enterprise, asfollows:
(a) if primary format of an enterprise is business segments, therequired secondary-format disclosures are identified in paragraph48;
(b) if primary format of an enterprise is geographical segments basedon location of assets (where the products of the enterprise areproduced or where its service rendering operations are based),the required secondary-format disclosures are identified inparagraphs 49 and 50;
(c) if primary format of an enterprise is geographical segments basedon the location of its customers (where its products are sold orservices are rendered), the required secondary-format disclosuresare identified in paragraphs 49 and 51.
48. If primary format of an enterprise for reporting segment informationis business segments, it should also report the following information:
(a) segment revenue from external customers by geographical areabased on the geographical location of its customers, for eachgeographical segment whose revenue from sales to externalcustomers is 10 per cent or more of enterprise revenue;
(b) the total carrying amount of segment assets by geographicallocation of assets, for each geographical segment whosesegment assets are 10 per cent or more of the total assets of allgeographical segments; and
(c) the total cost incurred during the period to acquire segment assetsthat are expected to be used during more than one period (tangibleand intangible fixed assets) by geographical location of assets,for each geographical segment whose segment assets are 10 percent or more of the total assets of all geographical segments.
49. If primary format of an enterprise for reporting segment information isgeographical segments (whether based on location of assets or location of
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customers), it should also report the following segment information for eachbusiness segment whose revenue from sales to external customers is 10 percent or more of enterprise revenue or whose segment assets are 10 per cent ormore of the total assets of all business segments:
(a) segment revenue from external customers;
(b) the total carrying amount of segment assets; and
(c) the total cost incurred during the period to acquire segmentassets that are expected to be used during more than one period(tangible and intangible fixed assets).
50. If primary format of an enterprise for reporting segment information isgeographical segments that are based on location of assets, and if the locationof its customers is different from the location of its assets, then the enterpriseshould also report revenue from sales to external customers for eachcustomer-based geographical segment whose revenue from sales to externalcustomers is 10 per cent or more of enterprise revenue.
51. If primary format of an enterprise for reporting segment information isgeographical segments that are based on location of customers, and if theassets of the enterprise are located in different geographical areas from itscustomers, then the enterprise should also report the following segmentinformation for each asset-based geographical segment whose revenue fromsales to external customers or segment assets are 10 per cent or more of totalenterprise amounts:
(a) the total carrying amount of segment assets by geographicallocation of the assets; and
(b) the total cost incurred during the period to acquire segmentassets that are expected to be used during more than one period(tangible and intangible fixed assets) by location of the assets.
Illustrative Segment Disclosures52. Illustration III attached to this Standard Illustrates the disclosures forprimary and secondary formats that are required by this Standard.
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Other Disclosures53. In measuring and reporting segment revenue from transactions withother segments, inter-segment transfers should be measured on the basisthat the enterprise actually used to price those transfers. The basis ofpricing inter-segment transfers and any change therein should be disclosedin the financial statements.
54. Changes in accounting policies adopted for segment reporting thathave a material effect on segment information should be disclosed. Suchdisclosure should include a description of the nature of the change, andthe financial effect of the change if it is reasonably determinable.
55. AS 5 requires that changes in accounting policies adopted by theenterprise should be made only if required by statute, or for compliancewith an accounting standard, or if it is considered that the change wouldresult in a more appropriate presentation of events or transactions in thefinancial statements of the enterprise.
56. Changes in accounting policies adopted at the enterprise level thataffect segment information are dealt with in accordance with AS 5. AS 5requires that any change in an accounting policy which has a material effectshould be disclosed. The impact of, and the adjustments resulting from,such change, if material, should be shown in the financial statements of theperiod in which such change is made, to reflect the effect of such change.Where the effect of such change is not ascertainable, wholly or in part, thefact should be indicated. If a change is made in the accounting policieswhich has no material effect on the financial statements for the current periodbut which is reasonably expected to have a material effect in later periods,the fact of such change should be appropriately disclosed in the period inwhich the change is adopted.
57. Some changes in accounting policies relate specifically to segmentreporting. Examples include changes in identification of segments andchanges in the basis for allocating revenues and expenses to segments. Suchchanges can have a significant impact on the segment information reportedbut will not change aggregate financial information reported for theenterprise. To enable users to understand the impact of such changes, thisStandard requires the disclosure of the nature of the change and the financialeffect of the change, if reasonably determinable.
Segment Reporting 315
58. An enterprise should indicate the types of products and servicesincluded in each reported business segment and indicate the compositionof each reported geographical segment, both primary and secondary, ifnot otherwise disclosed in the financial statements.
59. To assess the impact of such matters as shifts in demand, changes inthe prices of inputs or other factors of production, and the development ofalternative products and processes on a business segment, it is necessary toknow the activities encompassed by that segment. Similarly, to assess theimpact of changes in the economic and political environment on the risksand returns of a geographical segment, it is important to know thecomposition of that geographical segment.
316 AS 17 (issued 2000)Ill
ustr
atio
n I
Segm
ent D
efin
ition
Dec
ision
Tre
eTh
e pu
rpos
e of
this
illu
stra
tion
is to
illu
stra
te th
e ap
plic
atio
n of
par
agra
phs 2
4-32
of t
he A
ccou
ntin
g St
anda
rd.
Use
the
segm
ents
repo
rted
to th
e bo
ard
of d
irect
ors
and
CEO
aD
o so
me
man
agem
ent r
epor
ting
segm
ents
mee
t the
def
initi
ons
in p
ara
5 (p
ara
20)
busi
ness
seg
men
ts o
r geo
grap
hica
l seg
men
ts (p
ara
20)
Thos
e se
gmen
ts m
ay b
e re
porta
ble
segm
ents
Doe
s th
e se
gmen
t exc
eed
the
quan
titat
ive
thre
shol
ds (p
ara
27)
No
Yes
Thos
e se
gmen
ts m
ay b
e re
porta
ble
segm
ents
a.Th
is s
egm
ent m
ay b
e se
para
tely
repo
rted
desp
ite it
s si
ze.
b.If
not
sep
arat
ely
repo
rted,
it is
una
lloca
ted
reco
ncili
ng it
em (p
ara
28)
Doe
s to
tal s
egm
ent e
xter
nal r
even
ue e
xcee
d 75
%N
oId
entif
y ad
ditio
nal s
egm
ents
unt
il 75
%of
tota
l ent
erpr
ise
reve
nue
(par
a 29
)th
resh
old
is re
ache
d (p
ara
29)
▼▼
▼▼
▼
▼▼
▼
▼
▼
▼
Do
the
segm
ents
refle
cted
in th
e m
anag
emen
t rep
ortin
g sy
stem
mee
t the
requ
isite
def
initi
ons
ofbu
sine
ss o
r geo
grap
hica
l seg
men
ts in
par
a 5
(par
a 24
)
No
Yes
For t
hose
seg
men
ts th
at d
o no
t mee
t the
def
initi
ons,
go to
the
next
low
er le
vel o
f int
erna
l seg
men
tatio
nth
at re
ports
info
rmat
ion
alon
g pr
oduc
t/ser
vice
line
s or
geo
grap
hica
l lin
es (p
ara
25)
Yes
No
Segment Reporting 317Ill
ustr
atio
n II
Illus
trat
ion
on D
eter
min
atio
n of
Rep
orta
ble
Segm
ents
[Par
agra
phs 2
7-29
]Th
is il
lust
ratio
n do
es n
ot fo
rm p
art o
f the
Acc
ount
ing
Stan
dard
. Its
pur
pose
is to
illu
stra
te th
e ap
plic
atio
n of
par
agra
phs
27-2
9 of
the
Acco
untin
g St
anda
rd.
An
ente
rpris
e op
erat
es th
roug
h ei
ght s
egm
ents
, nam
ely,
A, B
, C, D
, E, F
, G a
nd H
. The
rele
vant
info
rmat
ion
abou
t the
sese
gmen
ts is
giv
en in
the
follo
win
g ta
ble
(am
ount
s in
Rs.’
000)
:
AB
CD
EF
GH
Tota
l (Se
gmen
ts)
Tota
l (En
terp
rise)
1.SE
GM
EN
T R
EV
EN
UE
(a) E
xter
nal S
ales
-25
515
1015
5020
3540
0
(b) I
nter
-seg
men
t Sal
es10
060
305
--
5-
200
(c) T
otal
Rev
enue
100
315
4515
1550
2535
600
400
2. T
otal
Rev
enue
of e
ach
16.7
52.
57.
52.
5 2
.58.
34.
25.
8se
gmen
t as a
per
cent
age
ofto
tal r
even
ue o
f all
segm
ents
318 AS 17 (issued 2000)3.
SEG
ME
NT
RE
SULT
5(9
0)15
(5)
8(5
)5
7[P
rofit
/(Los
s)]
4. C
ombi
ned
Res
ult o
f all
515
85
740
Segm
ents
in p
rofit
s
5. C
ombi
ned
Res
ult o
f all
(90)
(5)
(5)
(100
)Se
gmen
ts in
loss
6. S
egm
ent R
esul
t as a
590
155
85
57
perc
enta
ge o
f the
gre
ater
of th
e to
tals
arr
ived
at 4
and
5 ab
ove
in a
bsol
ute
amou
nt(i.
e., 1
00)
7.SE
GM
EN
T A
SSE
TS
15 4
75
11
35
5 9
100
8. S
egm
ent a
sset
s as a
15 4
75
11
35
5 9
perc
enta
ge o
f tot
al a
sset
sof
all
segm
ents
The
repo
rtabl
e se
gmen
ts o
f the
ent
erpr
ise
will
be
iden
tifie
d as
bel
ow:
(a)
In ac
cord
ance
with
par
agra
ph 2
7(a)
, seg
men
ts w
hose
tota
l rev
enue
from
exte
rnal
sale
s and
inte
r-seg
men
t sal
es is
10%
or m
ore o
f the
tota
l rev
enue
of a
ll se
gmen
ts, e
xter
nal a
nd in
tern
al, s
houl
d be
iden
tifie
d as
repo
rtabl
e seg
men
ts.
Ther
efor
e, S
egm
ents
A a
nd B
are
repo
rtabl
e se
gmen
ts.
AB
CD
EF
GH
Tota
l (Se
gmen
ts)
Tota
l (En
terp
rise)
Segment Reporting 319(b
)A
s per
the r
equi
rem
ents
of p
arag
raph
27(
b), i
t is t
o be
firs
t ide
ntifi
ed w
heth
er th
e com
bine
d re
sult
of al
l seg
men
tsin
pro
fit o
r the
com
bine
d re
sult
of a
ll se
gmen
ts in
loss
is g
reat
er in
abs
olut
e am
ount
. Fr
om th
e ta
ble,
it is
evi
dent
that
com
bine
d re
sult
in lo
ss (i
.e.,
Rs.1
00,0
00) i
s gre
ater
. The
refo
re, t
he in
divi
dual
segm
ent r
esul
t as a
per
cent
age
of R
s.100
,000
nee
ds to
be
exam
ined
. In
acc
orda
nce
with
par
agra
ph 2
7(b)
, Seg
men
ts B
and
C a
re re
porta
ble
segm
ents
as t
heir
segm
ent r
esul
t is m
ore
than
the
thre
shol
d lim
it of
10%
.
(c)
Segm
ents
A, B
and
D a
re re
porta
ble
segm
ents
as p
er p
arag
raph
27(
c), a
s the
ir se
gmen
t ass
ets a
re m
ore
than
10%
of th
e to
tal s
egm
ent a
sset
s.
Thus
, Seg
men
ts A
, B, C
and
D a
re re
porta
ble
segm
ents
in te
rms o
f the
crit
eria
laid
dow
n in
par
agra
ph 2
7.
Para
grap
h 28
of t
he S
tand
ard
give
s an
optio
n to
the m
anag
emen
t of t
he en
terp
rise t
o de
sign
ate a
ny se
gmen
t as a
repo
rtabl
ese
gmen
t. In
the
give
n ca
se, i
t is p
resu
med
that
the
man
agem
ent d
ecid
es to
des
igna
te S
egm
ent E
as a
repo
rtabl
e se
gmen
t.
Para
grap
h 29
requ
ires t
hat i
f tot
al e
xter
nal r
even
ue a
ttrib
utab
le to
repo
rtabl
e se
gmen
ts id
entif
ied
as a
fore
said
con
stitu
tes
less
than
75%
of t
he to
tal e
nter
pris
e rev
enue
, add
ition
al se
gmen
ts sh
ould
be i
dent
ified
as re
porta
ble s
egm
ents
even
if th
eydo
not
mee
t the
10%
thre
shol
ds in
par
agra
ph 2
7, u
ntil
at le
ast 7
5% o
f tot
al e
nter
pris
e re
venu
e is
incl
uded
in re
porta
ble
segm
ents
.
The
tota
l ext
erna
l rev
enue
of S
egm
ents
A, B
, C, D
and
E, i
dent
ified
abo
ve a
s rep
orta
ble
segm
ents
, is R
s.295
,000
. Th
is is
less
than
75%
of t
otal
ent
erpr
ise
reve
nue
of R
s.400
,000
. The
man
agem
ent o
f the
ent
erpr
ise
is re
quire
d to
des
igna
te a
nyon
e or
mor
e of
the
rem
aini
ng se
gmen
ts a
s rep
orta
ble
segm
ent(s
) so
that
the
exte
rnal
reve
nue
of re
porta
ble
segm
ents
is a
tle
ast 7
5% o
f the
tota
l ent
erpr
ise
reve
nue.
Sup
pose
, the
man
agem
ent d
esig
nate
s Se
gmen
t H fo
r thi
s pu
rpos
e. N
ow th
eex
tern
al re
venu
e of
repo
rtabl
e se
gmen
ts is
mor
e th
an 7
5% o
f the
tota
l ent
erpr
ise
reve
nue.
Segm
ents
A, B
, C, D
, E a
nd H
are
repo
rtabl
e se
gmen
ts. S
egm
ents
F a
nd G
will
be
show
n as
reco
ncili
ng it
ems.
320 AS 17 (issued 2000)Ill
ustr
atio
n II
IIll
ustr
ativ
e Se
gmen
t Disc
losu
res
This
illu
stra
tion
does
not
form
par
t of t
he A
ccou
ntin
g St
anda
rd. I
ts p
urpo
se is
to il
lust
rate
the
appl
icat
ion
of p
arag
raph
s38
-59
of th
e Ac
coun
ting
Stan
dard
.
This
illu
stra
tion
illus
trate
s th
e se
gmen
t dis
clos
ures
that
this
Sta
ndar
d w
ould
req
uire
for
a d
iver
sifie
d m
ulti-
loca
tiona
lbu
sine
ss e
nter
pris
e. T
his e
xam
ple
is in
tent
iona
lly c
ompl
ex to
illu
stra
te m
ost o
f the
pro
visi
ons o
f thi
s Sta
ndar
d.
INFO
RM
ATIO
N A
BO
UT
BU
SIN
ESS
SE
GM
EN
TS
(NO
TE
xx)
(All
amou
nts i
n R
s. la
khs)
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
REV
ENU
EEx
tern
al55
5020
1719
167
7sa
les
Inte
r-15
1010
142
42
2(2
9)(3
0)se
gmen
tsa
les
Tota
l70
6030
3121
209
9(2
9)(3
0)10
190
Rev
enue
Pape
r Pro
ducts
Offic
e Pro
ducts
Publ
ishin
gOt
her O
pera
tions
Elim
inat
ions
Cons
olida
ted T
otal
Segment Reporting 321
RE
SULT
Segm
ent
2017
97
21
00
(1)
(1)
3024
resu
lt
Una
lloca
ted
(7)
(9)
corp
orat
eex
pens
es
Ope
ratin
g23
15pr
ofit
Inte
rest
(4)
(4)
expe
nse
Inte
rest
23
inco
me
Inco
me
(7)
(4)
taxe
s
Prof
it fr
om14
10or
dina
ryac
tiviti
es
Pape
r Pro
ducts
Offic
e Pro
ducts
Publ
ishin
gOt
her O
pera
tions
Elim
inat
ions
Cons
olida
ted T
otal
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
322 AS 17 (issued 2000)
Extra
ord-
(3)
(3)
inar
y lo
ss:
unin
sure
dea
rthqu
ake
dam
age
tofa
ctor
yN
et p
rofit
147
OT
HE
RIN
FOR
-M
ATIO
NSe
gmen
t54
5034
3010
1010
910
899
asse
tsU
nallo
cate
d67
56co
rpor
ate
asse
tsTo
tal
175
155
asse
tsSe
gmen
t25
158
118
81
142
35lia
bilit
ies
Pape
r Pro
ducts
Offic
e Pro
ducts
Publ
ishin
gOt
her O
pera
tions
Elim
inat
ions
Cons
olida
ted T
otal
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Segment Reporting 323
Una
lloca
ted
4055
corp
orat
elia
bilit
ies
Tota
l82
90lia
bilit
ies
Cap
ital
1210
35
54
3ex
pend
iture
Dep
re-
97
97
53
34
ciat
ion
Non
-cas
h8
27
32
22
1ex
pens
esot
her t
han
depr
e-ci
atio
n
Not
e xx
-Bus
ines
s and
Geo
grap
hica
l Seg
men
ts (a
mou
nts i
n R
s. la
khs)
Busi
ness
segm
ents
: For
man
agem
ent p
urpo
ses,
the C
ompa
ny is
org
anis
ed o
n a w
orld
wid
e bas
is in
to th
ree m
ajor
ope
ratin
gdi
visi
ons-
pape
r pro
duct
s, of
fice
prod
ucts
and
pub
lishi
ng —
eac
h he
aded
by
a se
nior
vic
e pr
esid
ent.
The
divi
sion
s are
the
Pape
r Pro
ducts
Offic
e Pro
ducts
Publ
ishin
gOt
her O
pera
tions
Elim
inat
ions
Cons
olida
ted T
otal
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Curre
ntPr
eviou
sCu
rrent
Prev
ious
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
324 AS 17 (issued 2000)ba
sis o
n w
hich
the c
ompa
ny re
ports
its p
rimar
y se
gmen
t inf
orm
atio
n. T
he p
aper
pro
duct
s seg
men
t pro
duce
s a b
road
rang
eof
writ
ing
and
publ
ishi
ng p
aper
s an
d ne
wsp
rint.
The
offic
e pr
oduc
ts s
egm
ent m
anuf
actu
res
labe
ls, b
inde
rs, p
ens,
and
mar
kers
and
als
o di
strib
utes
off
ice
prod
ucts
mad
e by
oth
ers.
The
pub
lishi
ng s
egm
ent d
evel
ops
and
sells
boo
ks in
the
field
s of
taxa
tion,
law
and
acc
ount
ing.
Oth
er o
pera
tions
incl
ude
deve
lopm
ent o
f com
pute
r sof
twar
e fo
r sta
ndar
d an
dsp
ecia
lised
bus
ines
s app
licat
ions
. Fin
anci
al in
form
atio
n ab
out b
usin
ess s
egm
ents
is p
rese
nted
in th
e ab
ove
tabl
e (f
rom
page
314
to p
age
317)
.G
eogr
aphi
cal s
egm
ents
: Alth
ough
the
Com
pany
’s m
ajor
ope
ratin
g di
visi
ons
are
man
aged
on
a w
orld
wid
e ba
sis,
they
oper
ate
in fo
ur p
rinci
pal g
eogr
aphi
cal a
reas
of t
he w
orld
. In
Indi
a, it
s ho
me
coun
try, t
he C
ompa
ny p
rodu
ces
and
sells
abr
oad
rang
e of p
aper
s and
offi
ce p
rodu
cts.
Add
ition
ally
, all
of th
e Com
pany
’s pu
blish
ing
and
com
pute
r sof
twar
e dev
elop
men
top
erat
ions
are c
ondu
cted
in In
dia.
In
the E
urop
ean
Uni
on, t
he C
ompa
ny o
pera
tes p
aper
and
offic
e pro
duct
s man
ufac
turin
gfa
cilit
ies a
nd sa
les o
ffice
s in
the
follo
win
g co
untri
es: F
ranc
e, B
elgi
um, G
erm
any
and
the
U.K
. Ope
ratio
ns in
Can
ada
and
the
Uni
ted
Stat
es a
re e
ssen
tially
sim
ilar a
nd c
onsi
st o
f man
ufac
turin
g pa
pers
and
new
sprin
t tha
t are
sol
d en
tirel
y w
ithin
thos
e tw
o co
untri
es.
Ope
ratio
ns in
Indo
nesi
a in
clud
e th
e pr
oduc
tion
of p
aper
pul
p an
d th
e m
anuf
actu
re o
f writ
ing
and
publ
ishi
ng p
aper
s and
offi
ce p
rodu
cts,
alm
ost a
ll of
whi
ch is
sold
out
side
Indo
nesi
a, b
oth
to o
ther
segm
ents
of t
he co
mpa
nyan
d to
ext
erna
l cus
tom
ers.
Sale
s by m
arke
t: Th
e fol
low
ing
tabl
e sho
ws t
he d
istri
butio
n of
the C
ompa
ny’s
cons
olid
ated
sale
s by
geog
raph
ical
mar
ket,
rega
rdle
ss o
f whe
re th
e go
ods w
ere
prod
uced
:
Sale
s Rev
enue
by
Geo
grap
hica
l Mar
ket
Cur
rent
Yea
rPr
evio
us Y
ear
Indi
a19
22
Euro
pean
Uni
on30
31
Segment Reporting 325C
anad
a an
d th
e U
nite
d St
ates
2821
Mex
ico
and
Sout
h A
mer
ica
62
Sout
heas
t Asi
a (p
rinci
pally
Jap
an a
nd T
aiw
an)
1814
101
90
Asse
ts a
nd a
dditi
ons t
o ta
ngib
le a
nd in
tang
ible
fixe
d as
sets
by g
eogr
aphi
cal a
rea:
The
follo
win
g ta
ble s
how
s the
carr
ying
amou
nt o
f seg
men
t ass
ets a
nd ad
ditio
ns to
tang
ible
and
inta
ngib
le fi
xed
asse
ts b
y ge
ogra
phic
al ar
ea in
whi
ch th
e ass
ets a
relo
cate
d:
Car
ryin
gA
dditi
ons t
oA
mou
nt o
fFi
xed
Ass
ets
Segm
ent A
sset
san
dIn
tang
ible
Ass
ets
Cur
rent
Prev
ious
Cur
rent
Prev
ious
Year
Year
Year
Year
Indi
a72
788
5
Euro
pean
Uni
on47
375
4
Can
ada
and
the
Uni
ted
Stat
es34
204
3
Indo
nesi
a22
207
6
175
155
2418
326 AS 17 (issued 2000)Se
gmen
t rev
enue
and
expe
nse:
In In
dia,
pap
er an
d of
fice p
rodu
cts a
re m
anuf
actu
red
in co
mbi
ned
faci
litie
s and
are s
old
bya
com
bine
d sa
les f
orce
. Joi
nt re
venu
es a
nd e
xpen
ses a
re a
lloca
ted
to th
e tw
o bu
sine
ss se
gmen
ts o
n a
reas
onab
le b
asis
. All
othe
r seg
men
t rev
enue
and
exp
ense
are
dire
ctly
attr
ibut
able
to th
e se
gmen
ts.
Segm
ent a
sset
s an
d lia
bilit
ies:
Seg
men
t ass
ets
incl
ude
all o
pera
ting
asse
ts u
sed
by a
seg
men
t and
con
sist
prin
cipa
lly o
fop
erat
ing
cash
, deb
tors
, inv
ento
ries a
nd fi
xed
asse
ts, n
et o
f allo
wan
ces a
nd p
rovi
sion
s whi
ch ar
e rep
orte
d as
dire
ct o
ffset
sin
the b
alan
ce sh
eet.
Whi
le m
ost s
uch a
sset
s can
be di
rect
ly at
tribu
ted t
o ind
ivid
ual s
egm
ents
, the
carr
ying
amou
nt of
certa
inas
sets
use
d jo
intly
by
two
or m
ore s
egm
ents
is al
loca
ted
to th
e seg
men
ts o
n a r
easo
nabl
e bas
is. S
egm
ent l
iabi
litie
s inc
lude
all o
pera
ting
liabi
litie
s an
d co
nsis
t prin
cipa
lly o
f cre
dito
rs a
nd a
ccru
ed li
abili
ties.
Segm
ent a
sset
s an
d lia
bilit
ies
do n
otin
clud
e de
ferr
ed in
com
e ta
xes.
Inte
r-se
gmen
t tra
nsfe
rs:
Segm
ent
reve
nue,
seg
men
t ex
pens
es a
nd s
egm
ent
resu
lt in
clud
e tra
nsfe
rs b
etw
een
busi
ness
segm
ents
and
bet
wee
n ge
ogra
phic
al se
gmen
ts. S
uch
trans
fers
are
acc
ount
ed fo
r at c
ompe
titiv
e m
arke
t pric
es c
harg
ed to
unaf
filia
ted
cust
omer
s for
sim
ilar g
oods
. Tho
se tr
ansf
ers a
re e
limin
ated
in c
onso
lidat
ion.
Unu
sual
item
: Sal
es o
f of
fice
prod
ucts
to e
xter
nal c
usto
mer
s in
the
curr
ent y
ear
wer
e ad
vers
ely
affe
cted
by
a le
ngth
ystr
ike o
f tra
nspo
rtatio
n w
orke
rs in
Indi
a, w
hich
inte
rrupt
ed p
rodu
ct sh
ipm
ents
for a
ppro
xim
atel
y fo
ur m
onth
s. Th
e Com
pany
estim
ates
that
sale
s of o
ffice
pro
duct
s dur
ing
the f
our-m
onth
per
iod
wer
e app
roxi
mat
ely
half
of w
hat t
hey
wou
ld o
ther
wis
eha
ve b
een.
Extr
aord
inar
y los
s: A
s mor
e ful
ly d
iscu
ssed
in N
ote x
, the
Com
pany
incu
rred
an u
nins
ured
loss
of R
s.3,0
0,00
0 ca
used
by
earth
quak
e da
mag
e to
a p
aper
mill
in In
dia
durin
g th
e pr
evio
us y
ear.
Segment Reporting 327
Illustration IVSummary of Required Disclosure
This illustration does not form part of the Accounting Standard. Its purpose is tosummarise the disclosures required by paragraphs 38-59 for each of the threepossible primary segment reporting formats.
Figures in parentheses refer to paragraph numbers of the relevant paragraphs in thetext.
PRIMARY FORMAT PRIMARY FORMAT PRIMARY FORMATIS BUSINESS IS GEOGRAPHICAL IS GEOGRAPHICALSEGMENTS SEGMENTS BY SEGMENTS BY
LOCATION OF LOCATION OFASSETS CUSTOMERS
Required Primary Required Primary Required PrimaryDisclosures Disclosures Disclosures
Revenue from external Revenue from external Revenue from externalcustomers by business customers by location of customers by location ofsegment [40(a)] assets [40(a)] customers [40(a)]
Revenue from Revenue from Revenue fromtransactions with other transactions with other transactions with othersegments by business segments by location of segments by location ofsegment [40(a)] assets [40(a)] customers [40(a)]
Segment result by Segment result by Segment result bybusiness segment location of assets location of customers[40(b)] [40(b)] [40(b)]
Carrying amount of Carrying amount of Carrying amount ofsegment assets by segment assets by segment assets bybusiness segment location of assets location of customers[40(c)] [40(c)] [40(c)]
Segment liabilities by Segment liabilities by Segment liabilities bybusiness segment location of assets location of customers[40(d)] [40(d)] [40(d)]
Cost to acquire tangible Cost to acquire tangible Cost to acquire tangibleand intangible fixed and intangible fixed and intangible fixedassets by business assets by location of assets by location ofsegment [40(e)] assets [40(e)] customers [40(e)]
328 AS 17 (issued 2000)
PRIMARY FORMAT PRIMARY FORMAT PRIMARY FORMATIS BUSINESS IS GEOGRAPHICAL IS GEOGRAPHICALSEGMENTS SEGMENTS BY SEGMENTS BY
LOCATION OF LOCATION OFASSETS CUSTOMERS
Required Primary Required Primary Required PrimaryDisclosures Disclosures Disclosures
Depreciation and Depreciation and Depreciation andamortisation expense amortisation expense by amortisation expense byby business segment location of assets[40(f)] location of[40(f)] customers[40(f)]
Non-cash expenses Non-cash expenses Non-cash expensesother than depreciation other than depreciation other than depreciationand amortisation by and amortisation by and amortisation bybusiness segment location of assets location of customers[40(g)] [40(g)] [40(g)]
Reconciliation of Reconciliation of Reconciliation ofrevenue, result, assets, revenue, result, assets, revenue, result, assets,and liabilities by and liabilities [46] and liabilities [46]business segment [46]
Required Secondary Required Secondary Required SecondaryDisclosures Disclosures Disclosures
Revenue from external Revenue from external Revenue from externalcustomers by location customers by business customers by businessof customers [48] segment [49] segment [49]
Carrying amount of Carrying amount of Carrying amount ofsegment assets by segment assets by segment assets bylocation of assets [48] business segment [49] business segment [49]
Cost to acquire tangible Cost to acquire tangible Cost to acquire tangibleand intangible fixed and intangible fixed and intangible fixedassets by location of assets by business assets by businessassets [48] segment [49] segment [49]
Revenue from externalcustomers bygeographical customersif different fromlocation of assets [50]
Segment Reporting 329
PRIMARY FORMAT PRIMARY FORMAT PRIMARY FORMATIS BUSINESS IS GEOGRAPHICAL IS GEOGRAPHICALSEGMENTS SEGMENTS BY SEGMENTS BY
LOCATION OF LOCATION OFASSETS CUSTOMERS
Required Secondary Required Secondary Required SecondaryDisclosures Disclosures Disclosures
Carrying amount ofsegment assets bylocation of assets ifdifferent from locationof customers [51]
Cost to acquire tangibleand intangible fixedassets by location ofassets if different fromlocation of customers[51]
Other Required Other Required Other RequiredDisclosures Disclosures Disclosures
Basis of pricing inter- Basis of pricing inter- Basis of pricing inter-segment transfers and segment transfers and segment transfers andany change therein [53] any change therein [53] any change therein [53]
Changes in segment Changes in segment Changes in segmentaccounting policies [54] accounting policies [54] accounting policies [54]
Types of products and Types of products and Types of products andservices in each services in each services in eachbusiness segment [58] business segment [58] business segment [58]
Composition of each Composition of each Composition of eachgeographical segment geographical segment geographical segment[58] [58] [58]