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A finance segment derives a MAJORITY of its revenues from interest, and the CODM relies primarily on NET INTEREST REVENUE to assess performance and allocate resources. Under Ind AS 108, this entity may:
ANet the segment's interest revenue and expense without any disclosure of the basis
BDisclose interest revenue and interest expense ONLY on a gross basis — Ind AS 108 always requires gross
CChoose either net or gross presentation without further explanation
DDisclose net interest revenue for that segment and state that net presentation has been used
Answer & Solution
Correct answer: D. Disclose net interest revenue for that segment and state that net presentation has been used
Para 23 of Ind AS 108 ordinarily requires separate disclosure of interest revenue and interest expense, but it permits net presentation specifically when (i) a majority of the segment's revenue is from interest AND (ii) the CODM relies primarily on net interest revenue. In that case the entity must disclose that net presentation has been used; silent netting and unconditional choice are not allowed.
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