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IFRS 8 amendments

Date recorded:

Clarifications to IFRS 8 Operating Segments arising from the post-implementation review — Two sweep issues: consistent information about reportable segments and increasing the number of line items — Agenda paper 27


The Staff is in the process of drafting the ED of the proposed amendments to IFRS 8 in response to the feedback received in the post-implementation review (‘PIR’) of IFRS 8. The purpose of this session was to discuss two issues that surfaced during the course of drafting.

Issues and staff analysis

Consistent identification of reportable segments: The original proposed amendments merely remind preparers of the benefits of consistency between the management commentary and the operating segment disclosures — there is no requirement to mandate such consistency. The Staff believes that in order to address the concerns raised in the PIR, and in light of the fact that the management commentary falls outside of the ambit of IFRS Standards, an entity should be required to explain in the financial statements any differences between the reported segments included in the financial statements and those included in the management commentary.

Increasing the number of reported line items: The Staff identified the following issues during drafting:

  1. Is it permissible for segment information to include additional information that is not reviewed by or regularly provided to the chief operating decision maker (‘CODM’)?
  2. Should an entity be permitted or required to disclose such additional information if it helps to meet the core principle of IFRS 8?

The Staff believes that IFRS 8 sets out the minimum requirements needed to meet the core principle of the Standard and that an entity may include additional information that is not reviewed by or regularly provided to the CODM if such disclosure helps to meet the core principle of IFRS 8. Nevertheless, as the disclosure requirements of IFRS 8 are based on the management approach, requiring an entity to disclose information not reviewed by the CODM would be a departure from this approach.

Staff recommendation

The Staff recommended that the Board amend IFRS 8 to:

  1. Require an entity to explain why the reported segments in the financial statements differ from those included in the management commentary; and
  2. State that an entity can disclose additional information about its reportable segments if this helps to meet the core principle of IFRS 8, even if this information is not reviewed by or otherwise regularly provided to the CODM.


The Board approved the Staff’s recommendations. With respect to a), the approval was subject to expanding the requirements to cover information included in the annual reporting package as a whole as opposed to information included in the annual report only.

Also with respect to a), some Board members suggested expanding the requirements to cover other communications to stakeholders e.g. analyst presentations; however, other members disagreed on the grounds that these other information were often specialised in nature and varied significantly from general purpose financial statements. Accordingly, they believed that it was only natural that differences should be expected, and that the expansion was far too wide in scope and would be difficult to apply in practice. These members believed that limiting the requirements to management commentary and other information included in the annual report was sufficient as these items were within the same package in which the financial statements were presented and users would therefore expect consistency. A Board member suggested that the requirements could cover information included in the annual reporting package which has a wider coverage than just the information included in the annual report (e.g. the annual reporting package might include information for regulatory filing purposes).

During the discussion, the Staff further recommended amending IFRS 8 to require entities to describe what the differences were between the financial statements and other information as well as why such differences existed. The Board approved the recommendation.

As regards b), the Board reiterated that there was no requirement stopping an entity from disclosing more information in the financial statements than what was required by IFRS. However, many Board members believed that the current issue arose from a perceived inconsistency between the management approach as required by IFRS 8.23 and 24 and the core principle of IFRS 8 as expressed in paragraphs 1 and 20. Some Board members cautioned against including an explicit permission to disclose further information as that might be misconstrued as prohibiting disclosure unless they were explicitly permitted in IFRS.

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