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Post-implementation review – IFRS 8

Date recorded:

In 2007, the Trustees added a post-implementation review process (PIR) of each new IFRSs or major amendment as a mandatory step to the IASB’s due process requirements. Phases of the PIR include an initial assessment and public consultation phase and an evaluation of evidence and presentation of findings phase.

At this meeting, the staff requested permission to publish a Request for Information (RFI) regarding the effect of implementing IFRS 8 Operating Segments as part of the public consultation phase of the PIR. As tentatively agreed at the May 2012 meeting, the structure of the proposed RFI would be based on the key decisions that were made when the IASB developed IFRS 8. These decisions included:

  • identifying segments based on the management approach;
  • measuring disclosed line items on the basis used for internal reporting; and
  • disclosing only those line items regularly reviewed by the chief operating decision maker.

The staff also proposed including further questions in the RFI on the identification of implementation issues and unexpected costs, the disclosure requirements of IFRS 8 and information about respondents. The IASB discussed, and gave comments on, the content and style of the questions proposed. Comments were primarily related to whether the questions posed were too ‘open ended’. Specifically, multiple Board members preferred to have more direct questions to uncover fatal flaw issues (e.g., Are you satisfied with IFRS 8 or would you prefer a new standard?). They feared the open ended questions proposed in the RFI would result in constituents voicing general concerns with IFRS 8; thus forcing the Board to re-open the entire standard. However, other Board members preferred the open ended questions proposed by the staff in order to understand all perceived flaws in the standard.

Ultimately, the IASB agreed to the staff's request to publish an RFI, structured in accordance with the staff's proposals. The IASB plans to consider responses to the RFI at a future date in conjunction with considering the results of planned outreach activities (primarily in the form of workshops with preparers, users, auditors, national standard setters and other accountancy organisations) on the effect of implementing IFRS 8.

The IASB also discussed preliminary findings of a review of academic literature currently available on the effect of applying IFRS 8. In those discussions the IASB identified some areas in which future academic research would be welcome, such as the effect of the implementation of IFRS 8 on interim reporting. The IASB plans to consider academic literature at a future date in advance of completing its post-implementation review of IFRS 8.

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