IFRS 8 "Operating Segments"

IFRS 8 "Operating Segments" is an international financial reporting standard that requires certain types of entities (particularly publicly traded companies) to disclose information about their operating segments, products and services, the geographical areas in which they operate, and their major customers. This standard aims to enable users of financial statements to see the entity’s operations through the eyes of management. Here are some key aspects of IFRS 8:

1. Operating Segments Identification: An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses related to transactions with other components of the same entity. An operating segment's performance is regularly reviewed by the entity's chief operating decision maker.

2. Reporting Requirements: IFRS 8 requires entities to report financial and descriptive information about their reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria.

3. Segment Profit or Loss and Assets: Entities must report a measure of profit or loss and total assets for each reportable segment. Additional information, such as segment liabilities and other particular income or expense items, may be reported based on how management reviews the segments.

4. Measurement: The amounts reported for each operating segment should be the measures reported to the chief operating decision maker for the purposes of making decisions about allocating resources to the segment and assessing its performance.

5. Reconciliations: IFRS 8 requires reconciliations of the total of the reportable segments' revenues, reported profit or loss, assets, liabilities, and other material items to corresponding amounts in the entity’s financial statements.

6. Entity-Wide Disclosures: The standard also requires entity-wide disclosures that provide information about products and services, geographical areas, and major customers, regardless of whether this information is the same as that used in making operating decisions.

7. Transparency and Consistency: The aim is to ensure transparency and consistency in reporting, allowing stakeholders to assess the performance of different segments of the business.

8. Regular Review: The information disclosed must be based on internal reports that are regularly reviewed by the entity's chief operating decision maker.

#IFRS #IAS #FinancialReporting #AccountingStandards #GAAP #IFRSUpdates #AccountingPolicy #CorporateAccounting #FinancialStatements #IASB #AccountingPrinciples #InternationalAccounting #AuditAndAssurance #FinancialDisclosure #RevenueRecognition #LeaseAccounting #AssetValuation #FinancialAnalysis #AccountingProfessionals #FinancialRegulation