Segment information to be disclosed
Segment reporting is intended to give information to investors and stakeholders regarding the financial results and financial position of the entity that are used by the entity’s chief operating decision maker (CODM). IFRS 8 ‘Operating Segments’ was developed by the International Accounting Standards Board (IASB) to provide requirements to reporting entities on this area, that can be challenging to apply in practice.
Our ‘Insights into IFRS 8’ series is designed to illustrate how IFRS 8 should be applied and provides guidance and insight in some problematic areas. We also include several examples illustrating the Standard’s disclosure requirements. This article sets out the segment information that is required to be disclosed in the financial statements of the reporting entity.
IFRS 8’s ‘management approach’ has the effect that reportable segments and segment information will vary according to the information used by the CODM. As a result, disclosures will not be consistent between entities, even those operating in similar industries. It is therefore important that users are provided with an explanation of how management has identified both the entity’s CODM and its operating segments and how the information reported to the CODM reconciles to the primary financial statements.
The disclosures required in IFRS 8 include both narrative and quantitative information
