252
AS 17
42. An example of a measure of segment performance above segment
result in the statement of profit and loss is gross margin on sales. Examples
of measures of segment performance below segment result in the statement
of profit and loss are profit or loss from ordinary activities (either before or
after income taxes) and net profit or loss.
43. Accounting
Standard 5, ‘Net Profit or Loss for the Period, Prior Period
Items and Changes in Accounting Policies’ requires that “when items of
income and expense within profit or loss from ordinary activities are of
such size, nature or incidence that their disclosure is relevant to explain the
performance of the enterprise for the period, the
nature and amount of such
items should be disclosed separately”. Examples of such items include write-
downs of inventories, provisions for restructuring, disposals of fixed assets
and long-term investments, legislative changes having retrospective
application, litigation settlements, and reversal of provisions.
An enterprise
is encouraged, but not required, to disclose the nature and amount of any
items of segment revenue and segment expense that are of such size, nature,
or incidence that their disclosure is relevant to explain
the performance of
the segment for the period. Such disclosure is not intended to change the
classification of any such items of revenue or expense from ordinary to
extraordinary or to change the measurement of such items. The disclosure,
however, does change the level at which the significance
of such items is
evaluated for disclosure purposes from the enterprise level to the segment
level.
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