Page 120 - DCOM409_CONTEMPORARY_ACCOUNTING

Unit 9: Issues and Recent Trends in Corporate Reporting

For example, Delhi Cloth and General Mills Ltd., which manufacturers cloth, Notes
computers, automobiles, PVC, and other engineering products, and would thus
need this kind of segment reporting.
Geographical divisions: If a company has operations extended in foreign markets,
geographical division-wise segmentation will be relevant. This will be more relevant
in the case of multinational corporations and other big companies with extensive
overseas operations. Even within a country (if it is big); there can be region-wise
segmentation for better management and reporting purposes.
Customer-type: Classification may be relevant in case of those who look for
comparability among firms. In this case a uniform standard industrial classification
is necessary. Comparability can be among firms of the same (absolute) size and type
of operations. For investors, however, that classification which permits the greatest
degree of predictability will be the most relevant.

Self Assessment

Fill in the blanks:

1. …………….statements enable the management to hide information from external
reporting.
2. The Institute of Chartered Accountants of India has issued standard on segmental reporting
…………….
3. Each segmental report will contain information as to the sales, ………….., assets and
liabilities pertaining to that segment.

4. If a company has diversified its production activities, and is manufacturing different and
distinct types of products, financial information can be provided on the basis of …………..
5. If a company has operations extended in foreign markets, …………….division-wise
segmentation will be relevant.

9.2 Social Reporting

Social reporting is reporting on those activities of an organisation that have an impact on
society at large and are not necessarily represented by its traditional financial report.
Aspects included in social reporting include such information disclosed in the annual reports
viz., Statement on Human Resource Accounting, Statement of Value Added Report on Foreign
Currency Transactions (revealing the balance of payments position) and Accounting for Various
Social Objectives.
The concept of social reporting is gaining popularity on account of the following factors:
Increasing awareness of society regarding the contributions the corporate units are making.

Providing meaningful means of identifying and rewarding business for social contribution.
Identifying adverse effects on the environment of the business houses.
Social reporting improves credibility and reputation of business.
Transferring cost of social activities to other segments of society.
The concept of social responsibility extends beyond the provisions embodied in current law.
Essentially, it represents an emerging debate having its roots in political and social theory.

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