Entity-wide disclosures
As well as financial disclosures, IFRS 8 requires other entity-wide, non-financial information disclosures, such as information about:
Operating Segments
An Introduction to Segment Reporting for IFRS 8
Introduction to Segment Reporting
Companies are often involved in a number of different industries or business activities. They often expand and diversify their operations across geographical areas.
As a result of this, their group is exposed to different rates of return, growth opportunities and risk for each ‘segment’ of their business.
Investors want information that highlights the performance of the various components of the organization.
This is where IFRS 8 Operating Segments steps in.
Segment Reporting: Identifying Operating Segments for IFRS 8
Operating Segment Identification
One of the first things an entity must do under IFRS 8 is to identify an operating segment.
Under IFRS 8 an operating segment is a component of an entity:
- that engages in business activities from which it earns revenues and incurs expenses
- whose operating results are regularly reviewed by the entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance, and
- for which discrete financial information is available.
Segment Reporting: Disclosures and Reconciliations for IFRS 8
Disclosures
IFRS 8 states that an entity shall disclose information so that users of the financial statements can evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.
Segment Reporting: Thresholds and Measurement for IFRS 8
Thresholds of Reportable Segments
An entity must report separately information about an operating segment that meets any of the following quantitative thresholds: