IASB publishes proposed improvements to IFRS 8

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29 Mar 2017

The International Accounting Standards Board (IASB) has 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 31 July 2017.



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 warranted further investigation. The IASB's subsequent discussions have now led to proposed clarifications and amendments around five issues one of which also regards IAS 34 Interim Financial Reporting.


Suggested changes

The amendments proposed in ED/2017/2 Improvements to IFRS 8 'Operating Segments' (Proposed amendments to IFRS 8 and IAS 34) are:

  • Description of the chief operating decision maker. The IASB proposes to clarify IFRS 8 by:
    • stressing that the chief operating decision maker is the function that makes operating decisions and decisions about allocating resources to operating segments and assesses their performance;
    • noting that the chief operating decision maker can be an individual or a group;
    • stating that a group identified as a chief operating decision maker can have non-executive members; and
    • requiring that an entity discloses the title and description of the role of the individual or the group identified as the chief operating decision maker.
  • Identification of reportable segments. Proposed amendments to IFRS 8 regarding this issue include:
    • requiring that an explanation of the reasons is disclosed if segments identified in the financial statements differ from segments identified in other parts of the entity's reporting; and
    • adding further examples to the aggregation criteria for operating segments with similar economic characteristics.
  • Additional segment information. The IASB believes that IFRS 8 should be clarified by:
    • noting that under certain circumstances an entity may disclose segment information that goes beyond the information regularly provided to and reviewed by the chief operating decision maker.
  • Description of reconciling items. Regarding this issue IFRS 8 would be amended by:
    • clarifying that sufficiently detailed explanations are required for the reconciling items so that users can understand their nature.
  • Change in the composition of an entity’s reportable segments. This proposed amendment regards IAS 34 where the IASB suggests:
    • requiring that the first interim report after a change in the composition of an entity’s reportable segments must contain restated segment information for all interim periods presented.


Effective date and transition requirements

The exposure draft does not contain a proposed effective date which the IASB intends to decide on after the exposure. Nevertheless, 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.


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