Some Theory Questions:


What is meant by Segment ?

Segment is a separate component of an enterprise.

What are the types of segments?

 Segments can be:

  1. Business Segment :based on the products or services .
  2. Geographical Segment :based on location.

Why is segment reporting (segment information) shown in the Financial Statements?

It is mandatory under section 133 of the Companies Act, 2013.

What is the purpose of Segment Reporting?

As per AS 17, Segment Reporting  is useful for better understanding of the financial statements and taking decisions by the users.

What is Reportable Segment?

Reportable Segment is a Business Segment or Geographical Segment for which segment information is required to be disclosed.

What is Segment Result?

Segment result = Segment Revenue  –  Segment Expense


Numerical Questions relating to Segment Reporting:

Following type of questions can be asked in practical examination of Accountancy, regarding Segment Reporting:

Question 1.

The Second Quarter Report of a company gives following information about Segment Performance:

Segment Segment Sales(₹) Net Profit(₹)
Clothes 10,00,000 4,00,000
Machine 30,00,000 6,00,000
Footwear 16,00,000 6,00,000


Use Ratio Analysis, comment on the following:

(i) Which is the best segment?

(ii) If the company has to discontinue one segment, which segment should be discontinued?

Question 2.

The Third Quarter Report of a Company gives following information about Segment Performance:

Segment Segment Sales(₹) Net Profit(₹)
Water Purifier 20,00,000 4,00,000
Air Purifier 30,00,000 8,00,000
Fashion Accessories 40,00,000 6,00,000


From the above data, find out which is the best segment and which segment should be discontinued if the company has to discontinue one segment.

Question 3.

The Quarterly Report of a company gives the following information about its Sales Revenue and Net Profit for the second quarter of the current year and the second quarter of the previous year:

Particulars Second Qtr. of 2016-17(₹) Second Quarter of 2015-16(₹)
Sales Revenue 16,00,000 13,00,000
Net Profit  3,80,000  3,00,000


Which quarter is performing better? Has the performance improved? Comment using ratios as tools of your analysis.


Where to find data for Segment Reporting?


Students can search for the Segment Information like Segment Revenue, Segment Results or Segment wise Capital employed etc. of any one of the companies like:

  1. Bata India Ltd. Annual Report 2018-19
  2. Bajaj Auto Ltd. Annual Report 2018-19
  3. Bombay Dyeing Annual Report 2018-19
  4. Godrej Industries Annual Report 2018-19
  5. Hindustan Unilever Annual Report 2018-19
  6. Infosys Annual Report 2018-19
  7. ITC Annual Report 2018-19
  8. Pidilite Annual Report 2018-19
  9. Tata Motors Annual Report 2018-19
  10. Tata Steel Annual Report 2018-19
  11. Reliance Industries Ltd Annual Report 2018-19

Links are updated as and when these are available.

How to prepare the project on Segment Reporting?


Complete guidance regarding project work on Segment Reporting has been given by C.B.S.E. on Pages No. 46 to 52 of  Guidelines on Project work in Accountancy.

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