IASB consults on IFRS 8 Operating Segments review

The International Accounting Standards Board (IASB) is consulting on proposals to make minor amends to IFRS 8 Operating Segments, with a new requirement to disclose the title and role of the influential decision maker

First issued in 2006, IFRS 8 sets out the disclosure requirements for information about a company’s operating segments, products and services, as well as about the geographical areas in which it operates and its major customers.

The key change requires companies to provide the title and description of the role of the individual or the group which is identified as the chief operating decision maker; and provide an explanation of, and the reasons for, the difference in reportable segments identified in the financial statements compared with the segments identified in other parts of the entity’s annual reporting package, if there is such a difference.

The decision to amend the standard is the result of a post-implementation review (PIR) into IFRS 8 which identified some areas that could benefit from improvements.

The following amendments are proposed:

  • to clarify and emphasise the criteria that must be met before two operating segments may be aggregated;
  • to require companies to disclose the title and role of the person or group that performs the function of the chief operating decision maker; and
  • to require companies to provide information in the notes to the financial statements if segments in the financial statements differ from segments reported elsewhere in the annual report and in accompanying materials.

The IASB is also planning to amend IAS 34 Interim Financial Reporting to require companies that change their segments to provide restated segment information for prior interim periods earlier than they currently do.

The consultation is open for comments until 31 July 2017.

The Exposure Draft, Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34), is available here

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