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Clarifications to IFRS 8, Operating segments, arising from the post-implementation review [ED]

Comment period ends on July 31, 2017

Proposed effective date:

The exposure draft does not contain a proposed effective date, which the IASB intends to decide on after the exposure. Nevertheless, the iASB has already concluded that earlier application would be permitted, however, the amendments to IFRS 8 and the amendments to IAS 34 must be applied at the same time.

Next steps:

The Board plans to issue a Feedback Statement in December 2018

Last updated:

September 2018

Reach out to our IFRS 8 Specialist

Kerry Danyluk

Overview

The IASB carries out a post-implementation review of each new IFRS or major amendment. In July 2013, the IASB completed the post-implementation review of IFRS 8, Operating Segments. The final report concluded that the benefits of applying the standard were largely as expected and that overall the standard achieved its objectives and has improved financial reporting. However, the IASB identified a number of issues that could be considered for improvement and that warrant further investigation.

 

Other developments

September 2018 

On September 20, 2018, the IASB® staff updated the work plan to indicate that the Board plans to issue a Feedback Statement in December 2018.

July 2018 

On July 18, 2018, the IASB® staff updated the work plan to indicate that the Board plans to issue a Feedback Statement in Q4/2018.

March 2018 

On March 23, 2018, the IASB® staff updated the work plan to indicate that the Board expects to issue a Feedback Statement in the second half of 2018.

January 2018

On January 26, 2018, the IASB Staff updated this project to indicate that the IASB now expects to decide the project direction in March 2018. 

November 2017

On November 16, 2017, the IASB staff updated the work plan to indicate that the IASB expects to decide the project direction in January 2018.

September 2017

On September 22, 2017, the IASB staff updated the work plan to indicate that the IASB expects to review the Exposure Draft Feedback in November 2017.

June 2017

In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to discuss the Exposure Draft feedback in Q4/2017.

April 2017

On April 28, 2017, the AcSB issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by July 31, 2017.

March 2017

On March 29, 2017, the IASB published an exposure draft Improvements to IFRS 8, Operating Segments (Proposed amendments to IFRS 8 and IAS 34). It contains proposed amendments in five areas. Comments are requested by July 31, 2017.

February 2017

On February 27, 2017, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish an Exposure Draft for comment in March 2017.

January 2017

On January 19, 2017, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish an Exposure Draft for comment in April 2017.

December 2016

On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish an Exposure Draft for comment by June 2017.

September 2016

On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish an Exposure Draft for comment by March 31, 2017.

July 2016

On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish an Exposure Draft for comment sometime before January 31, 2017.

March 2016

On March 18, 2016, the IASB updated its Work Plan in respect of this project to note that it is currently drafting an Exposure Draft, which it expects to issue by September 30, 2016.

November 2015

On November 23, 2015, the IASB updated its Work Plan in respect of this project to note that it is currently drafting an Exposure Draft, which it expects to issue by May 31, 2016.

July 2013

On July, 18, 2013, the IASB published Report and Feedback Statement Post-implementation Review: IFRS 8 Operating Segments. The report concluded that the benefits of applying the Standard were largely as expected and that overall the Standard achieved its objectives and has improved financial reporting. However, the IASB identified a number of issues that could be considered for improvement and that warrant further investigation. These include feedback that:

Requests for implementation guidance

  • The concept of an identifiable chief operating decision maker (CODM) is confusing and outdated. Identification of the CODM is difficult in practice.
  • Some preparers are uncertain how the reconciliation should be presented and how reconciling amounts should be disclosed. Some investors find the items included in the reconciliations difficult to understand.

Requests for improved disclosures

  • Any change in the basis of segmentation from one year to the next results in the loss for investors of valuable trend information for that entity.
  • Many entities present different definitions of ‘operating result’ or ‘operating cash flow’, making comparison difficult between entities. Investors report that important line items needed to derive these sub-totals are often not separately reported.
  • Many investors think that operating segments are aggregated inappropriately, reducing the value of the information presented. Some preparers find the aggregation guidance difficult to apply in practice.
  • Some investors cannot understand how reconciling amounts relate to an individual segment.

 

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