Segment reporting helps investors in analyzing the risk and return associated with a particular segment. The author discusses the Indian Accounting Standard, AS 17, relating to segment reporting. Segment information is required for assessing the risks and returns of a diversified or multi-location enterprise that may not be determinable from the aggregate data. Such information when presented helps users of financial statements.

The difference hardly needs any explanation. If a stakeholder looks at the overall figure of PBT, he is bound to feel satisfied but can the same satisfaction be drawn after comparing the profitability of the two segments! The performance of "Pipes and Fittings" segment stands in no comparison with `PVC' segment. AS 17 is to be applied in presenting general-purpose financial statements including consolidated financial statements. If a single financial report contains both consolidated financial statements and the separate financial statements of the parent, then the segment information needs to be presented only on the basis of the consolidated financial statements.

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