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ESMA comment letter on the IASB’s Exposure Draft on proposed improvements to IFRS 8

  • ESMA (European Securities and Markets Authority) (dark gray) Image

18 Jul 2017

The European Securities and Markets Authority (ESMA) has issued its comment letter on the IASB’s Exposure Draft, ‘Improvements to IFRS 8 'Operating Segments' (Proposed amendments to IFRS 8 and IAS 34)'.

ESMA is supportive of the proposed amendments and particularly welcomes the IASB’s proposal to stress that the chief operating decision maker (CODM) is the function that makes operating decisions, makes decisions about allocation of resources to operating segments and assesses their performance.  However ESMA suggests that the IASB “clarifies how to address situations in which the CODM may differ from the decision maker in charge of the allocation of resources”. 

ESMA also supports the proposals that would require disclosure of the reasons for any differences between segments identified in the financial statements and segments identified in other parts of the entity's ‘annual reporting package’.  However ESMA recommends that the International Accounting Standards Board (IASB) does not provide a definition of ‘annual reporting package’ but instead refers to the terminology already adopted in paragraph B88(a) of IFRS 15 Revenue from Contracts with Customers.

Additionally ESMA is expresses concerns over the proposed wording of the new paragraph 20A and suggests that the wording is reconsidered by the IASB.

The full comment letter is available on the ESMA website.

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