Segment reporting practices: A study on select listed NBFCS in the light of implementation of ‘IND AS’

Abstract

Segment reporting provides an overview of products, services and geographical areas in which entity operates; it also helps in better understanding of performance of the various segments of the enterprise which enables the investors to make informed judgments about the enterprise as a whole. In this paper, an attempt has been made to discuss the key differences between erstwhile accounting standards for segment reporting i.e., AS 17 and Ind AS 108 and also to understand how NBFCs’ segment reporting practices was affected due to implementation of Ind AS 108. We considered a sample of 100 NBFCs for the analysis. By comparing the segment reporting as per ‘AS’ and ‘Ind AS’ of the select sample NBFCs, we found that 13 out of 24 (i.e., out of those having reportable segment from the sample of 2018-19 adopters) and 10 out of 20 (i.e., out of those having reportable segment from the sample of 2019-20 adopters) made changes in segment reporting practices. It is also important to note most of the NBFCs do not have any reportable segment since they have only one business segment i.e., Financing or investment.