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ARTICLE
ing accounting standard on segment reporting AS 17 and thereof. It is a well established fact that this management
aligns with requirements of IFRS 8. It states that, the en- approach is only way to improve financial reporting as it
terprise should prepare its segment report on the basis of allows users of financial statements to review the finan-
operating segments which have determined by its key de- cial statement through the eye of management. This
cision makers (i.e. the managerial approach). The main would enable the users to predict the future prospects to
change from the current standard is the introduction of some extent which is more useful to the prospective in-
management approach. vestors. It also helps to reduce the preparation costs and
ensure timely completion of the report as these disaggre-
In the time of issuing IFRS 8, IASB has recognized one of gated information is already used by the internal decision
the benefits with this new approach is that, information makers.
through the eye of management will allow users to better
judge the entity's operations. As this new approach has Core Principle
been prescribed in new standard (i.e. Ind AS 108) which
has already been issued and scheduled to be imple- An entity should disclose information in such a way that
mented, so some questions may arises whether this stan- the users of financial statements shall be able to evaluate:
dard should bring any change in reporting practices in In- The nature and financial effects of the business of op-
dia or to what extent it is different from existing standard
AS 17 and it is really in the line of IFRS 8 or not. erations in which it engages; and
The surrounding economic environment in which it
operates.
In this backdrop, the present article makes an endeavor Scope
to evaluate the newness of the standard in compare to
the existing standard AS 17 and also examine the degree This standard only shall be applicable to that companies
of similarity with the IFRS 8. Finally prospective impact on which has been notified in the Companies Indian Account-
reporting should also be investigated to judge the potenti- ing Standards Rule 2015. If any company prepared its seg-
ality to meet the modern needs of the stakeholders. ment report without complying to this standard, the in-
formation reported in this report should not be treated as
To address the core objective of the study, the paper has segment information even though the company is not
been divided into eight sections. The first section has es- bound to follow the standard so far as the above rule is
tablished theme of the study along with its core objective. concern. If any financial report contained both stand-
A brief account of Ind AS 108 has been discussed in the alone and consolidated financial statements of the par-
second section. The third section has highlighted the ent, segment information need to be presented only in
unique features of it. Section four has made a comparison the consolidated financial statements.
between AS 17 and Ind AS 108. Section five has identified
the distinction between Ind AS 108 and IFRS 8. Sixth sec- Operating Segments
tion of this paper has explored the prospective impact of
it on segment reporting practices in India. Section seven An operating segment is a component of an en-
has attempted to evaluate it critically. Finally a logistic tity
conclusion has been offered in the last section.
That engages in business activities from which it may
earn revenues and incur expenses;
Ind AS 108 in Short Whose operating results are reviewed regularly by
the entity's chief operating decision maker to make
'Management Approach' has been introduced for deter-
decision about its resource to be allocated to the seg-
mining the operating segments and segmental informa-
ment and assess its performance; and
tion required to be reported for them. Operating seg-
ments are identified on the basis of internal reports used For which discrete financial information is available.
by the chief operating decision maker for allocating re- Usually the chief executive officer or chief operating
sources to the segment and assessing the performance officer or a group of executive directors may jointly
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