Applicability of segment reporting practices in selected Indian industries

The concept of segment reporting in a formalized form is almost 32 years old. It was in 1974 when the FASB (Financial Accounting Standard Board) of USA issued SFAS 14: Financial reporting forsegments of a business enterprise. It was strongly encouraged by the financial analyst community and that was the beginning of segment reporting. After, this International Accounting Standards Committee issued IAS-14 reporting Financial Information by segment in 1981. Both SFAS 14 and IAS 14 were revised to make segment reporting more information. SFAS 14 was revised by the FASB with the issue of SFAS 131 in 1997, whereas IAS 14 was revised in 1998. The basic features of SFAS 131, IAS 14 and AS 17 are almost similar. Now, several countries through the standards issued by their respective nation's institutions have made the segment reporting mandatory Present study is based on identification of annual reports of ninety -five companies and shows that segment-reporting practices of Indian companies have taken a new turn after the implementation of AS-17. Although the attempts made by the Indian companies are highly appreciable, yet more efforts are required to make segment reporting more meaningful and purposeful. Since there is a significant difference in the segment reporting disclosure practices in the corporate units, there is a need of uniform set of guidelines, as well as uniform format so that an international understanding in the corporate world may develop.