Segments [joint with FASB]

Date recorded:

Dialogue on segments projects with the FASB (IASB Agenda Paper 27A)


The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) (together “the boards”) are currently both performing work on segment reporting. The objective of this session was to update the FASB on the post-implementation review (PIR) of IFRS 8 Operating Segments and the subsequent work arising from that review. The IASB staff initially set out the background and history of the PIR and the Exposure Draft (ED) issued in response to the findings of the PIR. The IASB staff then discussed the key findings from the feedback to the ED. Based on this feedback, the IASB decided not to amend IFRS 8 at this time as, in aggregate, the proposals that the IASB supported would not result in sufficient improvements in information to investors to justify the cost that stakeholders would incur if the IASB were to amend IFRS 8.

Staff recommendation

The session was for educational purposes and therefore the agenda paper did not contain any staff recommendations. FASB Board members were invited to ask any questions they might have on the project.


The discussion focused on aggregation criteria with one FASB member asking whether the IASB had considered adjusting the criteria. The IASB Technical Principal confirmed this but feedback revealed that adding a clarification was not enough. The IASB’s Accounting Standards Advisory Forum (ASAF) was consulted as regards the FASB approach, but feedback from ASAF had also been negative. The IASB has therefore decided not to move forward with this. An IASB member added that a part-solution was considered but eventually discarded. On average number of segments, the IASB did not have conclusive statistics. FASB research had indicated that US entities have more reportable segments than entities applying IFRS, however the research might not be directly comparable as this depends on the entity size.

Simplification of the Aggregation Criteria and Improving Segment Disclosures (FASB Agenda Papers 27B–27C)


The FASB is currently considering making some targeted changes to Topic 280, Segment Reporting, which is substantially converged with IFRS 8. As regards the segment aggregation process, the FASB is considering to either remove the aggregation criteria (but retain the practical limit guidance) or re-order the process for determining reportable segments and so that the quantitative thresholds are considered earlier in that process. As regards disclosures, the FASB is focusing on three areas:

  • Add individual pieces of segmental information to the list of required disclosures
  • Require the disclosures to be reported in a table
  • Require a table of regularly reviewed information based on how it relates to the lines in the financial statements

The FASB staff presented the purpose of the project and issues identified that are outside the scope of the project. The FASB staff then looked into the details of the proposed improvements.

Staff recommendation

The session was for educational purposes and therefore does not contain any staff recommendations. The FASB staff asked for IASB members’ comments and questions.


IASB members found the consideration to remove the aggregation criteria interesting, however one IASB member asked why the FASB would retain the practical limit. In the IASB member’s view, it would open up opportunities to conceal important information. The FASB’s project lead replied that removing the aggregation criteria would not be a workable approach without the practical limit as some entities have up to 50 reportable segments.

As regards the disclosure requirements, one IASB member asked whether introducing a table would actually increase information. The FASB’s project lead replied that it could inspire a behavioural change to provide the information required. Another IASB suggested to focus on information regularly reviewed by the CODM rather than information available to the CODM. It was also asked whether segment asset information was mandatory, to which the FASB replied it is only mandatory if it is regularly reviewed by the CODM.

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