Contents
INTERNATIONAL FINANCIAL REPORTING STANDARD 8
OPERATING SEGMENTS
CORE PRINCIPLE
1
SCOPE
2
OPERATING SEGMENTS
5
REPORTABLE SEGMENTS
11
Aggregation criteria
12
Quantitative thresholds
13
DISCLOSURE
20
General information
22
Information about profit or loss, assets and liabilities
23
MEASUREMENT
25
Reconciliations
28
Restatement of previously reported information
29
ENTITY-WIDE DISCLOSURES
31
Information about products and services
32
Information about geographical areas
33
31
Information about products and services
32
Information about geographical areas
33
Information about major customers
34
TRANSITION AND EFFECTIVE DATE
35
WITHDRAWAL OF IAS 14
37
APPENDICES
A Defined term
B Amendments to other IFRSs
APPROVAL BY THE BOARD OF IFRS 8 ISSUED IN NOVEMBER 2006
FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITION
IMPLEMENTATION GUIDANCE
APPENDIX
Amendments to other Implementation Guidance
FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION
FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION
BASIS FOR CONCLUSIONS
APPENDICES TO THE BASIS FOR CONCLUSIONS
A Background information and basis for conclusions of the US Financial Accounting Standards Board on SFAS 131
B Amendments to the Basis for Conclusions on other IFRSs
DISSENTING OPINIONS
International Financial Reporting Standard 8
Operating Segments
(IFRS 8) is set out in
paragraphs 1–37
and
Appendices A
and B
Operating Segments
(IFRS 8) is set out in
paragraphs 1–37
and
Appendices A
and B
. All the paragraphs have equal authority. Paragraphs in
bold type
state the main principles. Definitions of terms are given in the
Glossary
. IFRS 8 should be read in the context of its
core principle
and the
Basis for Conclusions
, the
Preface to IFRS Accounting Standards
and the
Conceptual Framework for Financial Reporting
.
and the
Conceptual Framework for Financial Reporting
.
Basis of Preparation of Financial Statements
provides a basis for selecting and applying accounting policies in the absence of explicit guidance.
[
Refer:
IAS 8 paragraphs 10–12
]
International Financial Reporting Standard 8
Operating Segments
Core principle
1
]
International Financial Reporting Standard 8
Operating Segments
Core principle
1
An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
Scope
[
Refer:
Basis for Conclusions paragraphs BC18–BC23
]
2
This IFRS shall apply to:
(a)
the separate or individual financial statements of an entity:
(i)
]
2
This IFRS shall apply to:
(a)
the separate or individual financial statements of an entity:
(i)
whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over‑the‑counter market, including local and regional markets), or
(ii)
that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and
(b)
(b)
the consolidated financial statements of a group with a parent:
(i)
whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over‑the‑counter market, including local and regional markets), or
(ii)
that files, or is in the process of filing, the consolidated financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market.
[
Refer:
[
Refer:
Basis for Conclusions paragraph BC23
]
3
If an entity that is not required to apply this IFRS chooses to disclose information about segments that does not comply with this IFRS, it shall not describe the information as segment information.
[
Refer:
Basis for Conclusions paragraph BC22
]
4
[
Refer:
Basis for Conclusions paragraph BC22
]
4
If a financial report contains both the consolidated financial statements of a parent that is within the scope of this IFRS as well as the parent’s separate financial statements, segment information is required only in the consolidated financial statements.
[
Refer:
Basis for Conclusions paragraph BC21
]
Operating segments
5
An operating segment is a component of an entity:
(a)
]
Operating segments
5
An operating segment is a component of an entity:
(a)
that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
(b)
whose operating results are regularly reviewed by the entity’s chief operating decision maker
[
Refer:
paragraph 7
]
to make decisions about resources to be allocated to the segment and assess its performance, and
(c)
(c)
for which discrete financial information is available.
An
operating segment
may engage in business activities for which it has yet to earn revenues, for example, start‑up operations may be operating segments before earning revenues.
6
Not every part of an entity is necessarily an
operating segment
6
Not every part of an entity is necessarily an
operating segment
or part of an operating segment. For example, a corporate headquarters or some functional departments may not earn revenues or may earn revenues that are only incidental to the activities of the entity and would not be operating segments. For the purposes of this IFRS, an entity’s post‑employment benefit plans are not operating segments.
7
7
The term ‘chief operating decision maker’ identifies a function, not necessarily a manager with a specific title. That function is to allocate resources to and assess the performance of the operating segments of an entity. Often the chief operating decision maker of an entity is its chief executive officer or chief operating officer but, for example, it may be a group of executive directors or others.
8
For many entities, the three characteristics of
operating segments
described in
8
For many entities, the three characteristics of
operating segments
described in
paragraph 5
clearly identify its operating segments. However, an entity may produce reports in which its business activities are presented in a variety of ways
. If the chief operating decision maker uses more than one set of segment information, other factors may identify a single set of components as constituting an entity’s operating segments, including the nature of the business activities of each component, the existence of managers responsible for them, and information presented to the board of directors.
9
Generally, an
operating segment
has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. The term ‘segment manager’ identifies a function, not necessarily a manager with a specific title. The chief operating decision maker
[
Refer:
paragraph 7
]
[
Refer:
paragraph 7
]
also may be the segment manager for some operating segments. A single manager may be the segment manager for more than one operating segment. If the characteristics in
paragraph 5
apply to more than one set of components of an organisation but there is only one set for which segment managers are held responsible, that set of components constitutes the operating segments.
10
The characteristics in
paragraph 5
10
The characteristics in
paragraph 5
may apply to two or more overlapping sets of components for which managers are held responsible. That structure is sometimes referred to as a matrix form of organisation. For example, in some entities, some managers are responsible for different product and service lines worldwide, whereas other managers are responsible for specific geographical areas. The chief operating decision maker
[
Refer:
paragraph 7
]
[
Refer:
paragraph 7
]
regularly reviews the operating results of both sets of components, and financial information is available for both. In that situation, the entity shall determine which set of components constitutes the
operating segments
by reference to the core principle
[
Refer:
paragraph 1
]
.
[
Refer:
Basis for Conclusions paragraph BC27
]
Reportable segments
[
Refer:
Implementation Guidance paragraph IG7
FASB’s Basis for Conclusions on SFAS 131 paragraphs 71 and 72
]
11
FASB’s Basis for Conclusions on SFAS 131 paragraphs 71 and 72
]
11
An entity shall report separately information about each
operating segment
that:
(a)
has been identified in accordance with
paragraphs 5–10
or results from aggregating two or more of those segments in accordance with
paragraph 12
, and
(b)
exceeds the quantitative thresholds in
paragraph 13
.
Paragraphs 14–19
specify other situations in which separate information about an operating segment shall be reported.
Aggregation criteria
[
Refer:
Basis for Conclusions paragraph BC30
FASB’s Basis for Conclusions on SFAS 131 paragraphs 73 and 74
]
12
Operating segments
[
Refer:
paragraphs 5–10
]
]
12
Operating segments
[
Refer:
paragraphs 5–10
]
often exhibit similar long‑term financial performance if they have similar economic characteristics. For example, similar long‑term average gross margins for two operating segments would be expected if their economic characteristics were similar. Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of this IFRS,
[
Refer:
paragraph 1
]
[
Refer:
paragraph 1
]
the segments have similar economic characteristics, and the segments are similar in each of the following respects:
(a)
the nature of the products and services;
(b)
the nature of the production processes;
(c)
the type or class of customer for their products and services;
(d)
the methods used to distribute their products or provide their services; and
(e)
if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities.
Quantitative thresholds
[
Refer:
Basis for Conclusions paragraphs BC28–BC30
Implementation Guidance paragraph IG7
FASB’s Basis for Conclusions on SFAS 131 paragraphs 75–78
]
13
An entity shall report separately information about an
operating segment
[
Refer:
paragraphs 5–10
]
that meets any of the following quantitative thresholds:
(a)
[
Refer:
paragraphs 5–10
]
that meets any of the following quantitative thresholds:
(a)
Its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments.
(b)
(b)
The absolute amount of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss.
(c)
Its assets are 10 per cent or more of the combined assets of all operating segments.
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 76
]
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 76
]
Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if management believes that information about the segment would be useful to users of the financial statements.
14
An entity may combine information about
operating segments
[
Refer:
paragraphs 5–10
]
14
An entity may combine information about
operating segments
[
Refer:
paragraphs 5–10
]
that do not meet the quantitative thresholds with information about other operating segments that do not meet the quantitative thresholds to produce a reportable segment only if the operating segments have similar economic characteristics and share a majority of the aggregation criteria listed in
paragraph 12
.
[
Refer:
Basis for Conclusions paragraphs BC31–BC33
]
15
paragraph 12
.
[
Refer:
Basis for Conclusions paragraphs BC31–BC33
]
15
If the total external revenue reported by
operating segments
[
Refer:
paragraphs 5–10
]
constitutes less than 75 per cent of the entity’s revenue, additional operating segments shall be identified as reportable segments (even if they do not meet the criteria in
paragraph 13
) until at least 75 per cent of the entity’s revenue is included in reportable segments.
[
Refer:
Basis for Conclusions paragraphs BC31–BC33
[
Refer:
Basis for Conclusions paragraphs BC31–BC33
FASB’s Basis for Conclusions on SFAS 131 paragraph 76
]
16
Information about other business activities and
operating segments
[
Refer:
paragraphs 5–10
]
that are not reportable shall be combined and disclosed in an ‘all other segments’ category separately from other reconciling items in the reconciliations required by
paragraph 28
. The sources of the revenue included in the ‘all other segments’ category shall be described.
17
. The sources of the revenue included in the ‘all other segments’ category shall be described.
17
If management judges that an
operating segment
[
Refer:
paragraphs 5–10
]
identified as a reportable segment in the immediately preceding period is of continuing significance, information about that segment shall continue to be reported separately in the current period even if it no longer meets the criteria for reportability in
paragraph 13
.
18
If an
operating segment
[
Refer:
paragraphs 5–10
paragraph 13
.
18
If an
operating segment
[
Refer:
paragraphs 5–10
]
is identified as a reportable segment in the current period in accordance with the quantitative thresholds,
[
Refer:
paragraph 13
]
segment data for a prior period presented for comparative purposes shall be restated to reflect the newly reportable segment as a separate segment, even if that segment did not satisfy the criteria for reportability in
paragraph 13
paragraph 13
in the prior period, unless the necessary information is not available and the cost to develop it would be excessive.
19
There may be a practical limit to the number of reportable segments that an entity separately discloses beyond which segment information may become too detailed. Although no precise limit has been determined, as the number of segments that are reportable in accordance with
paragraphs 13–18
paragraphs 13–18
increases above ten, the entity should consider whether a practical limit has been reached.
Disclosure
[
Refer:
Basis for Conclusions paragraphs BC43–BC45
for the Board's reasons for not including a lack of competitive harm exemption
FASB’s Basis for Conclusions on SFAS 131 paragraphs 109–111
]
20
An entity shall disclose information to enable users
[
Refer:
Conceptual Framework
paragraphs 1.2–1.10
and
2.36
]
[
Refer:
Conceptual Framework
paragraphs 1.2–1.10
and
2.36
]
of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraphs 92–97
]
21
To give effect to the principle in
paragraph 20
, an entity shall disclose the following for each period for which a statement of comprehensive income is presented:
(a)
(a)
general information as described in
paragraph 22
;
(b)
information about reported segment profit or loss, including specified revenues and expenses included in reported segment profit or loss, segment assets, segment liabilities and the basis of measurement, as described in
paragraphs 23–27
; and
(c)
paragraphs 23–27
; and
(c)
reconciliations of the totals of segment revenues, reported segment profit or loss, segment assets, segment liabilities and other material segment items to corresponding entity amounts as described in
paragraph 28
.
Reconciliations of the amounts in the statement of financial position for reportable segments
[
Refer:
paragraphs 11–19
]
[
Refer:
paragraphs 11–19
]
to the amounts in the entity’s statement of financial position are required for each date at which a statement of financial position is presented. Information for prior periods shall be restated as described in
paragraphs 29 and 30
.
General information
22
An entity shall disclose the following general information:
(a)
factors used to identify the entity’s reportable segments,
[
Refer:
paragraphs 11–19
]
(a)
factors used to identify the entity’s reportable segments,
[
Refer:
paragraphs 11–19
]
including the basis of organisation (for example, whether management has chosen to organise the entity around differences in products and services, geographical areas, regulatory environments, or a combination of factors and whether operating segments have been aggregated);
(aa)
the judgements made by management in applying the aggregation criteria in
paragraph 12
(aa)
the judgements made by management in applying the aggregation criteria in
paragraph 12
. This includes a brief description of the operating segments that have been aggregated in this way and the economic indicators that have been assessed in determining that the aggregated operating segments share similar economic characteristics;
[
Refer:
Basis for Conclusions paragraphs BC30A and BC30B
]
and
(b)
types of products and services from which each reportable segment derives its revenues.
[
]
and
(b)
types of products and services from which each reportable segment derives its revenues.
[
Refer:
Implementation Guidance paragraph IG2
]
Information about profit or loss, assets and liabilities
[
Refer:
Implementation Guidance paragraph IG3
]
23
An entity shall report a measure of profit or loss for each reportable segment
[
Refer:
paragraphs 11–19
]
[
Refer:
paragraphs 11–19
]
. An entity shall report a measure of total assets and liabilities for each reportable segment if such amounts are regularly provided to the chief operating decision maker
[
Refer:
paragraph 7
]
.
[
Refer:
Basis for Conclusions paragraphs BC34–BC38
and
BC60(b)
]
paragraph 7
]
.
[
Refer:
Basis for Conclusions paragraphs BC34–BC38
and
BC60(b)
]
An entity shall also disclose the following about each reportable segment if the specified amounts are included in the measure of segment profit or loss reviewed by the chief operating decision maker, or are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss:
E1
(a)
E1
(a)
revenues from external customers;
(b)
revenues from transactions with other operating segments of the same entity;
(c)
interest revenue;
(d)
interest expense;
(e)
depreciation and amortisation;
(f)
material items of income and expense disclosed in accordance with
paragraph 42 of
Presentation and Disclosure in Financial Statements
;
(g)
paragraph 42 of
Presentation and Disclosure in Financial Statements
;
(g)
the entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method;
(h)
income tax expense or income; and
(i)
material non‑cash items other than depreciation and amortisation.
An entity shall report interest revenue separately from interest expense for each reportable segment unless a majority of the segment’s revenues are from interest and the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment and make decisions about resources to be allocated to the segment
. In that situation, an entity may report that segment’s interest revenue net of its interest expense and disclose that it has done so.
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 95
]
E1
[IFRIC®
Update
, June 2024, Agenda Decision, ‘
Operating Segments
—Disclosure of Revenues and Expenses for Reportable Segments'
The Committee received a request about how an entity applies the requirements in paragraph 23 of IFRS 8 to disclose for each reportable segment specified amounts related to segment profit or loss.
The request asked:
a.
The request asked:
a.
whether an entity is required to disclose the specified amounts in paragraph 23(a)–(i) of IFRS 8 for each reportable segment if those amounts are not reviewed separately by the chief operating decision maker (CODM);
b.
b.
whether an entity is required to disclose the specified amounts in paragraph 23(f) of IFRS 8 for each reportable segment if the entity presents or discloses those specified amounts applying a requirement in IFRS Accounting Standards other than paragraph 97 of
Presentation of Financial Statements
[now paragraph 42 of
Presentation and Disclosure in Financial Statements
]; and
c.
Presentation and Disclosure in Financial Statements
]; and
c.
how an entity determines ‘material items’ in paragraph 23(f) of IFRS 8. In particular:
i.
whether ‘material items’ are only those items that are material on a qualitative basis;
ii.
whether ‘material items’ include amounts that are an aggregation of individual items that are quantitatively immaterial; and
iii.
iii.
whether the materiality assessment is performed at an income statement level (from an overall reporting entity perspective) or at a segment level.
The Committee observed that there are two main aspects to the questions:
a.
the requirements of paragraph 23 of IFRS 8 to disclose, for each reportable segment, specified amounts included in segment profit or loss reviewed by the CODM; and
b.
b.
the meaning of ‘material items of income and expense’ in the context of paragraph 97 of IAS 1 [now paragraph 42 of
] as referenced in paragraph 23(f) of IFRS 8.
Disclosure of specified amounts
Paragraph 23 of IFRS 8 requires an entity to report a measure of profit or loss for each reportable segment and to disclose specified amounts for each reportable segment
. Paragraph 23 sets out specified amounts that an entity is required to disclose for each reportable segment if the specified amounts are included in the measure of segment profit or loss reviewed by the CODM, or are otherwise regularly provided to the CODM, even if not included in that measure of segment profit or loss.
The Committee observed that paragraph 23 of IFRS 8 requires an entity to disclose the specified amounts for each reportable segment when those amounts are:
included in the measure of segment profit or loss reviewed by the CODM, even if they are not separately provided to or reviewed by the CODM, or
regularly provided to the CODM, even if they are not included in the measure of segment profit or loss.
Material items of income and expense
Material items of income and expense
Paragraph 23(f) of IFRS 8 sets out one of the required ‘specified amounts’, namely, ‘material items of income and expense disclosed in accordance with paragraph 97 of IAS 1’. Paragraph 97 of IAS 1 [now paragraph 42 of
] states that ‘when items of income or expense are material, an entity shall disclose their nature and amount separately’.
Definition of ‘material’
Paragraph 7 of IAS 1 [now Appendix A of
Definition of ‘material’
Paragraph 7 of IAS 1 [now Appendix A of
] defines ‘material’ and states ‘information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial reports make on the basis of those financial statements, which provide financial information about a specific reporting entity’.
Paragraph 7 of IAS 1 [now paragraph B2 of
Paragraph 7 of IAS 1 [now paragraph B2 of
] also states that ‘materiality depends on the nature or magnitude of information, or both. An entity assesses whether information, either individually or in combination with other information, is material in the context of its financial statements taken as a whole’.
Aggregation of information
Aggregation of information
Paragraphs 30–31 of IAS 1 provide requirements about how an entity aggregates information in the financial statements, which include the notes. Paragraph 30A of IAS 1 states that ‘an entity shall not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or functions’ [now paragraphs 41–43 of
].
Applying paragraph 23(f) of IFRS 8—material items of income and expense
The Committee observed that when IAS 1 [now
] refers to materiality, it is in the context of ‘information’ being material. An entity applies judgement in considering whether disclosing, or not disclosing, information in the financial statements could reasonably be expected to influence decisions users of financial statements make on the basis of those financial statements.
The Committee observed that, in applying paragraph 23(f) of IFRS 8 by disclosing, for each reportable segment, material items of income and expense disclosed in accordance with paragraph 97 of IAS 1 [now paragraph 42 of
], an entity:
a.
applies paragraph 7 of IAS 1 and assesses whether information about an item of income and expense is material in the context of its financial statements taken as a whole;
b.
b.
applies the requirements in paragraphs 30–31 of IAS 1 in considering how to aggregate information in its financial statements [now paragraphs 41–43 of
];
c.
considers the nature or magnitude of information—in other words, qualitative or quantitative factors—or both, in assessing whether information about an item of income and expense is material; and
d.
d.
considers circumstances including, but not limited to, those in paragraph 98 of IAS 1 [now paragraph B79 of
].
The Committee further observed that paragraph 23(f) of IFRS 8 does not require an entity to disclose by reportable segment each item of income and expense presented in its statement of profit or loss or disclosed in the notes
. In determining information to disclose for each reportable segment, an entity applies judgement and considers the core principle of IFRS 8—which requires an entity to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
Conclusion
The Committee concluded that the principles and requirements in IFRS Accounting Standards provide an adequate basis for an entity to apply the disclosure requirements in paragraph 23 of IFRS 8.
Consequently, the Committee decided not to add a standard-setting project to the work plan.]
24
An entity shall disclose the following about each reportable segment
[
Refer:
paragraphs 11–19
]
An entity shall disclose the following about each reportable segment
[
Refer:
paragraphs 11–19
]
if the specified amounts are included in the measure of segment assets reviewed by the chief operating decision maker
[
Refer:
paragraph 7
]
or are otherwise regularly provided to the chief operating decision maker, even if not included in the measure of segment assets:
(a)
the amount of investment in associates and joint ventures
[
Refer:
]
accounted for by the equity method, and
(b)
[
Refer:
]
accounted for by the equity method, and
(b)
the amounts of additions to non‑current assets
1
other than financial instruments, deferred tax assets,
[
Refer:
]
net defined benefit assets (see
Employee Benefits
) and rights arising under insurance contracts.
[
Refer:
Basis for Conclusions paragraphs BC56 and BC57
for the reason the IASB decided not to require separate disclosure of a subtotal of tangible non‑current assets
Basis for Conclusions paragraph BC60(a)
Basis for Conclusions paragraph BC60(a)
for a difference from SFAS 131]
Measurement
[
Refer:
Basis for Conclusions paragraphs BC24–BC26
FASB’s Basis for Conclusions on SFAS 131 paragraphs 81–91
]
25
The amount of each segment item reported shall be the measure reported to the chief operating decision maker
[
Refer:
paragraph 7
]
for the purposes of making decisions about allocating resources to the segment and assessing its performance. Adjustments and eliminations made in preparing an entity’s financial statements and allocations of revenues, expenses, and gains or losses shall be included in determining reported segment profit or loss only if they are included in the measure of the segment’s profit or loss that is used by the chief operating decision maker
. Similarly, only those assets and liabilities that are included in the measures of the segment’s assets and segment’s liabilities that are used by the chief operating decision maker shall be reported for that segment. If amounts are allocated to reported segment profit or loss, assets or liabilities, those amounts shall be allocated on a reasonable basis.
26
If the chief operating decision maker
[
Refer:
paragraph 7
]
uses only one measure of an
operating segment’s
profit or loss, the segment’s assets or the segment’s liabilities in assessing segment performance and deciding how to allocate resources, segment profit or loss, assets and liabilities shall be reported at those measures
. If the chief operating decision maker uses more than one measure of an operating segment’s profit or loss, the segment’s assets or the segment’s liabilities, the reported measures shall be those that management believes are determined in accordance with the measurement principles most consistent with those used in measuring the corresponding amounts in the entity’s financial statements.
27
An entity shall provide an explanation of the measurements of segment profit or loss, segment assets and segment liabilities for each reportable segment.
[
Refer:
Basis for Conclusions paragraph BC25
]
At a minimum, an entity shall disclose the following:
(a)
the basis of accounting for any transactions between reportable segments.
(b)
(a)
the basis of accounting for any transactions between reportable segments.
(b)
the nature of any differences between the measurements of the reportable segments’ profits or losses and the entity’s profit or loss before income tax expense or income and discontinued operations (if not apparent from the reconciliations described in
paragraph 28
paragraph 28
). Those differences could include accounting policies and policies for allocation of centrally incurred costs that are necessary for an understanding of the reported segment information.
(c)
the nature of any differences between the measurements of the reportable segments’
[
Refer:
paragraphs 11–19
]
assets and the entity’s assets (if not apparent from the reconciliations described in
paragraph 28
assets and the entity’s assets (if not apparent from the reconciliations described in
paragraph 28
). Those differences could include accounting policies and policies for allocation of jointly used assets that are necessary for an understanding of the reported segment information.
(d)
the nature of any differences between the measurements of the reportable segments’ liabilities and the entity’s liabilities (if not apparent from the reconciliations described in
paragraph 28
paragraph 28
). Those differences could include accounting policies and policies for allocation of jointly utilised liabilities that are necessary for an understanding of the reported segment information.
(e)
the nature of any changes from prior periods in the measurement methods used to determine reported segment profit or loss and the effect, if any, of those changes on the measure of segment profit or loss.
(f)
(f)
the nature and effect of any asymmetrical allocations to reportable segments. For example, an entity might allocate depreciation expense to a segment without allocating the related depreciable assets to that segment.
[
Refer:
Implementation Guidance paragraph IG2
]
Reconciliations
[
Refer:
Basis for Conclusions paragraphs BC25
and
BC39–BC42
Implementation Guidance paragraph IG4
]
28
An entity shall provide reconciliations of all of the following:
(a)
the total of the reportable segments’
(a)
the total of the reportable segments’
[
Refer:
paragraphs 11–19
]
revenues to the entity’s revenue.
(b)
the total of the reportable segments’ measures of profit or loss to the entity’s profit or loss before tax expense (tax income) and discontinued operations. However, if an entity allocates to reportable segments items such as tax expense (tax income), the entity may reconcile the total of the segments’ measures of profit or loss to the entity’s profit or loss after those items.
(c)
(c)
the total of the reportable segments’ assets to the entity’s assets if the segment assets are reported in accordance with
paragraph 23
.
[
Refer:
Basis for Conclusions paragraph BC35B
]
(d)
the total of the reportable segments’ liabilities to the entity’s liabilities if segment liabilities are reported in accordance with
paragraph 23
.
(e)
the total of the reportable segments’ amounts for every other material item of information disclosed to the corresponding amount for the entity.
All material reconciling items shall be separately identified and described. For example, the amount of each material adjustment needed to reconcile reportable segment profit or loss to the entity’s profit or loss arising from different accounting policies shall be separately identified and described.
Restatement of previously reported information
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 100
]
29
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 100
]
29
If an entity changes the structure of its internal organisation in a manner that causes the composition of its reportable segments
[
Refer:
paragraphs 11–19
]
to change, the corresponding information for earlier periods, including interim periods, shall be restated unless the information is not available and the cost to develop it would be excessive. The determination of whether the information is not available and the cost to develop it would be excessive shall be made for each individual item of disclosure
. Following a change in the composition of its reportable segments, an entity shall disclose whether it has restated the corresponding items of segment information for earlier periods.
30
If an entity has changed the structure of its internal organisation in a manner that causes the composition of its reportable segments
[
Refer:
paragraphs 11–19
]
[
Refer:
paragraphs 11–19
]
to change and if segment information for earlier periods, including interim periods, is not restated to reflect the change, the entity shall disclose in the year in which the change occurs segment information for the current period on both the old basis and the new basis of segmentation, unless the necessary information is not available and the cost to develop it would be excessive.
Entity‑wide disclosures
31
Paragraphs 32–34
Entity‑wide disclosures
31
Paragraphs 32–34
apply to all entities subject to this IFRS including those entities that have a single reportable segment
[
Refer:
paragraphs 11–19
]
. Some entities’ business activities are not organised on the basis of differences in related products and services or differences in geographical areas of operations. Such an entity’s reportable segments may report revenues from a broad range of essentially different products and services, or more than one of its reportable segments may provide essentially the same products and services
. Similarly, an entity’s reportable segments may hold assets in different geographical areas and report revenues from customers in different geographical areas, or more than one of its reportable segments may operate in the same geographical area. Information required by
paragraphs 32–34
shall be provided only if it is not provided as part of the reportable segment information required by this IFRS.
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraphs 101 and 102
]
Information about products and services
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 103
]
32
[
Refer:
FASB’s Basis for Conclusions on SFAS 131 paragraph 103
]
32
An entity shall report the revenues from external customers for each product and service, or each group of similar products and services, unless the necessary information is not available and the cost to develop it would be excessive
[
Refer:
Basis for Conclusions paragraphs BC46 and BC47
]
[
Refer:
Basis for Conclusions paragraphs BC46 and BC47
]
, in which case that fact shall be disclosed. The amounts of revenues reported shall be based on the financial information used to produce the entity’s financial statements.
Information about geographical areas
[
Refer:
Basis for Conclusions paragraphs BC51–BC53
FASB’s Basis for Conclusions on SFAS 131 paragraphs 104–107
]
33
FASB’s Basis for Conclusions on SFAS 131 paragraphs 104–107
]
33
An entity shall report the following geographical information, unless the necessary information is not available and the cost to develop it would be excessive
[
Refer:
Basis for Conclusions paragraphs BC46 and BC47
]
:
(a)
revenues from external customers (i) attributed to the entity’s country of domicile
[
Refer:
Basis for Conclusions paragraphs BC54 and BC55
]
[
Refer:
Basis for Conclusions paragraphs BC54 and BC55
]
and (ii) attributed to all foreign countries in total from which the entity derives revenues. If revenues from external customers attributed to an individual foreign country are material, those revenues shall be disclosed separately. An entity shall disclose the basis for attributing revenues from external customers to individual countries.
(b)
non‑current assets
2
[
Refer:
Basis for Conclusions paragraphs BC56, BC57
and
BC60(a)
]
(b)
non‑current assets
2
[
Refer:
Basis for Conclusions paragraphs BC56, BC57
and
BC60(a)
]
other than financial instruments, deferred tax assets, post‑employment benefit assets, and rights arising under insurance contracts (i) located in the entity’s country of domicile and (ii) located in all foreign countries in total in which the entity holds assets. If assets in an individual foreign country are material, those assets shall be disclosed separately.
The amounts reported shall be based on the financial information that is used to produce the entity’s financial statements. If the necessary information is not available and the cost to develop it would be excessive,
[
Refer:
Basis for Conclusions paragraphs BC46 and BC47
]
that fact shall be disclosed. An entity may provide, in addition to the information required by this paragraph, subtotals of geographical information about groups of countries.
[
Refer:
Implementation Guidance paragraph IG5
[
Refer:
Implementation Guidance paragraph IG5
]
[
Link to
Basis for Conclusions paragraphs BC48–BC50
for the IASB’s reasons for not requiring country‑by‑country disclosures]
Information about major customers
34
An entity shall provide information about the extent of its reliance on its major customers. If revenues from transactions with a single external customer amount to 10 per cent or more of an entity’s revenues,
[
Refer:
FASB's Basis for Conclusions on SFAS 131 paragraph 108
]
the entity shall disclose that fact, the total amount of revenues from each such customer, and the identity of the segment or segments reporting the revenues. The entity need not disclose the identity of a major customer or the amount of revenues that each segment reports from that customer. For the purposes of this IFRS, a group of entities known to a reporting entity to be under common control shall be considered a single customer
. However, judgement is required to assess whether a government (including government agencies and similar bodies whether local, national or international) and entities known to the reporting entity to be under the control of that government are considered a single customer. In assessing this, the reporting entity shall consider the extent of economic integration between those entities.
[
Refer:
Basis for Conclusions paragraph BC58
Implementation Guidance paragraph IG6
IAS 24 Basis for Conclusions paragraph BC49(c)
]
Transition and effective date
[
Refer:
Basis for Conclusions paragraphs BC61 and BC62
]
35
An entity shall apply this IFRS in its annual financial statements for periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies this IFRS in its financial statements for a period before 1 January 2009, it shall disclose that fact.
35A
Paragraph 23
was amended by
Improvements to IFRSs
issued in April 2009. An entity shall apply that amendment for annual periods beginning on or after 1 January 2010. Earlier application is permitted. If an entity applies the amendment for an earlier period it shall disclose that fact.
36
Segment information for prior years that is reported as comparative information for the initial year of application (including application of the amendment to
paragraph 23
paragraph 23
made in April 2009) shall be restated to conform to the requirements of this IFRS, unless the necessary information is not available and the cost to develop it would be excessive.
36A
IAS 1 (as revised in 2007)
amended the terminology used throughout IFRSs. In addition it amended
paragraph 23(f)
. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies
(revised 2007) for an earlier period, the amendments shall be applied for that earlier period.
3
36B
Related Party Disclosures
(as revised in 2009) amended
paragraph 34
for annual periods beginning on or after 1 January 2011. If an entity applies
(revised 2009) for an earlier period, it shall apply the amendment to
paragraph 34
for that earlier period.
36C
Annual Improvements to IFRSs 2010–2012 Cycle
paragraph 34
for that earlier period.
36C
Annual Improvements to IFRSs 2010–2012 Cycle
, issued in December 2013, amended paragraphs 22 and 28. An entity shall apply those amendments for annual periods beginning on or after 1 July 2014. Earlier application is permitted. If an entity applies those amendments for an earlier period it shall disclose that fact.
36D
issued in April 2024 amended
paragraph 23
. An entity shall apply those amendments when it applies
.
paragraph 23
. An entity shall apply those amendments when it applies
.
Withdrawal of IAS 14
37
This IFRS supersedes IAS 14
Segment Reporting
.
Appendices
Appendix A
Defined term
This appendix is an integral part of the IFRS.
operating segment
An operating segment is a component of an entity:
(a)
operating segment
An operating segment is a component of an entity:
(a)
that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
(b)
whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
(c)
(c)
for which discrete financial information is available.
[
Refer:
paragraph 5
]
Appendix B
Amendments to other IFRSs
The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2009. If an entity applies this IFRS for an earlier period, these amendments shall be applied for that earlier period. In the amended paragraphs, new text is underlined and deleted text is struck through.
* * * * *
* * * * *
The amendments contained in this appendix when this IFRS was issued in 2006 have been incorporated into the text of the relevant IFRSs in this volume.
Board Approvals
Approval by the Board of IFRS 8 issued in November 2006
International Financial Reporting Standard 8
Operating Segments
International Financial Reporting Standard 8
Operating Segments
was approved for issue by eleven of the thirteen members of the International Accounting Standards Board. Messrs Gélard and Leisenring dissented. Their dissenting opinions are set out after the Basis for Conclusions.
Sir David Tweedie
Chairman
Thomas E Jones
Vice‑Chairman
Mary E Barth
Hans‑Georg Bruns
Anthony T Cope
Jan Engström
Robert P Garnett
Gilbert Gélard
James J Leisenring
Warren J McGregor
Patricia L O’Malley
John T Smith
Gilbert Gélard
James J Leisenring
Warren J McGregor
Patricia L O’Malley
John T Smith
Tatsumi Yamada
Footnotes
1
For assets classified according to a liquidity presentation, non‑current assets are assets that include amounts expected to be recovered more than twelve months after the reporting period.
(back)
2
(back)
2
For assets classified according to a liquidity presentation, non‑current assets are assets that include amounts expected to be recovered more than twelve months after the reporting period.
(back)
3
In April 2024 the IASB issued
Presentation and Disclosure in Financial Statements
and carried over these requirements in
Presentation of Financial Statements
to
.
(back)
Presentation of Financial Statements
to
.
(back)
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