Some Theory Questions:
Segment Project
What is meant by Segment ?
Segment is a separate component of an enterprise.
What are the types of segments?
Segments can be:
- Business Segment :based on the products or services .
- 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
From 2023-24, Practical in Accountancy doesn't require written Exam. for Practical.
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 :
| Particulars | Second Qtr. of 2021-22(₹) | Second Quarter of 2020-21(₹) |
| 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 Project on 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:
- Bata India Ltd. Annual Report
- Bajaj Auto Ltd. Annual Report
- Bombay Dyeing Annual Report
- Godrej Industries Annual Report
- Hindustan Unilever Annual Report
- Infosys Annual Report
- ITC Annual Report
- Pidilite Annual Report
- Tata Motors Annual Report
- Tata Steel Annual Report
- Reliance Industries Annual Report
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.
Students can easily make their project file taking guidance from C.B.S.E. Guidelines and downloading the actual latest report for Segment Reporting.