Page 10 - 25. COMPILER QB - IND AS 108
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Heavy Goods Ltd. needs to determine how many reportable segments it has. You are required to advise Heavy
        Goods Ltd. as per the criteria defined in Ind AS 108.

        SOLUTION
        As per Ind AS 108, an entity shall report separately information about an operating segment that meets any
        of the following quantitative thresholds:

        a)  Its reported revenue, including both sales to external customers and inter-segment sales or transfers, is 10
            per cent or more of the combined revenue, internal and external, of all operating segments.
            Combined total  sales  of all the  segments =  Rs. 10,400  +  Rs.  35,350  = Rs.  45,750. 10% thresholds  =
            45,750 x 10% = 4,575.
        b)  The  absolute  amount  of  its  reported  profit  or  loss  is  10  per  cent  or  more  of  the  greater,  in  absolute

            amount, of
            i)  the combined reported profit of all operating segments that did not report a loss and
            ii)  the combined reported loss of all operating segments that reported a loss.
            In  the  given  situation,  combined  reported  profit  =  Rs.  6,000  and  combined  reported  loss  (Rs.  2,250).
            Hence, for 10% thresholds Rs. 6,000 will be considered.
            10% thresholds = Rs. 6,000 x 10% = Rs. 600

        c)  Its  assets  are  10  per  cent  or  more  of  the  combined  assets  of  all  operating  segments.  Combined  total
            assets of all the segment = Rs. 1,02,750
            10% thresholds = Rs. 1,02,750 x 10% = 10,275
        Accordingly, quantitative thresholds are calculated below:

                       Segments               L       M        N        O        P       Q       Reportable
                                                                                                 segments
            % segment sales to total sales   36.66%  24.59%   9.84%   11.48%   13.11%  4.92%      L, M,O,P
            % segment profit to total profits   50%   25%     25%     12.5%     15%     10%     L,M,N,O,P,Q
            % segment Assets to total assets  36.50%  22.63%  15.33%  10.22%   10.22%  5.11%     L,M,N,O,P

        Segments  L,  M,  O  and  P  clearly  satisfy  the  revenue  and  assets  tests  and  they  are  separate  reportable

        segments.
        Segment  N  does  not  satisfy  the  revenue  test,  but  it  does  satisfy  the  asset  test  and  it  is  a  reportable
        segment.
        Segment Q does not satisfy the revenue or the assets test but it does satisfy the profits test. Therefore,
        Segment Q is also a reportable segment.
        Hence, all segments i.e; L, M, N, O, P and Q are reportable segments.


        Q8 (July 21 – 6 Marks) – (Similar to Q5)
        U Limited is operating in the paint industry. Its business segments comprise paints (wall paints, lead paints,

        zinc paints, aluminium paints etc.), and others (consisting of primer, varnish, thinner and related products).
        Certain information for financial year 2020-2021 is given below:          (Rs. in lakh)
                      Segments  External Revenue  GST    Other operating  Result  Assets   Liabilities
                                    (Inc. GST)               income

                        Paints        10,000      250         2000        500    2500       1500
                        Other         3,500        150        750         200    1500       500

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