The Requirements Of Ifrs 8 Operating Segments

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Segmental Information


In general, IFRS 8 Operating Segments place a requirement on specific classes of entities (particularly those entities that have publicly traded securities) to disclose information concerning their respective operating segments, products and services, the geographical areas in which they compete as well as their major customers (IFRS 8 Operating Segments, 2014). The information that is provided by corporations pursuant to these requirements is based on internal management reports concerning the measurement of disclosed segment information as well as the identification of operating segments (IFRS 8 Operating Segments, 2014). Although its proponents argue that the IFRS 8 Operating Segments are adequate
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Where an entity’s debt or equity instruments are traded in a public market or
2. Where an entity files, or is in the process of filing, its (consolidated) financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market [IFRS 8.2] (IFRS 8 Operating Segments, 2014).

In those cases where consolidated as well as separate financial statements for the parent entity are consolidated into a single financial report, segment information is only required to be reported on the basis of the consolidated financial statements [IFRS 8.4] (IFRS 8 Operating Segments, 2014). The definition of an operating segment provided by IFRS 8 is being a component of an entity [IFRS 8.2]:
1. That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);
2. Whose operating results are reviewed regularly by the entity 's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and,
3. For which discrete financial information is available (IFRS 8 Operating Segments, 2014).

In addition, IFRS 8 Operating Segments contains a requirement for entities to report descriptive and financial information concerning its reportable segments which are defined as “operating segments or
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