Adequacy of IFRS 8 Operating Segments Essay

Open, View, and/or
Download this Document

Total Length: 1128 words ( 4 double-spaced pages)

Total Sources: 5

Page 1 of 4

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 for their intended purposes, critics counter that they are inadequate for certain applications. To determine the facts, this paper reviews the relevant literature to provide a timely discussion concerning whether the requirements of IFRS 8 Operating Segments can reasonably be criticised as being inadequate followed by a summary of the research and important findings concerning these issues in the conclusion.

Review and Discussion

The current version of IFRS 8 was promulgated in November 2006 with applicability to annual periods beginning on or after 1 January 2009 (IFRS 8 Operating Segments, 2014). At present, IFRS 8 is applicable to the individual or separate financial statements of an entity (and to the consolidated financial statements of a group with a parent) in those cases:

1. 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 organisation for the purpose of issuing any class of instruments in a public market [IFRS 8.2] (IFRS 8 Operating Segments, 2014).

Stuck Writing Your "Adequacy of IFRS 8 Operating Segments" Essay?

View All Our Example Adequacy of IFRS 8 Operating Segments Essay

Have A Custom Example Essay Written



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 aggregations of operating segments that meet specified criteria [IFRS 8.13]" (IFRS 8 Operating Segments, 2014). Further, IFRS 8 Operating Segments permits the aggregation of two or more operating segments into a single operating segment in those cases where segments have similar economic characteristics, such aggregation is congruent with the fundamental principles of the standard, and the operating segments are comparable in various prescribed respects [IFRS 8.12] (IFRS 8 Operating Segments, 2014). In those cases where the entity's total external revenue reported by operating segments.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Adequacy Of IFRS 8 Operating Segments" (2014, November 28) Retrieved May 17, 2024, from
https://www.aceyourpaper.com/essays/adequacy-ifrs-8-operating-segments-2153046

Latest MLA Format (8th edition)

Copy Reference
"Adequacy Of IFRS 8 Operating Segments" 28 November 2014. Web.17 May. 2024. <
https://www.aceyourpaper.com/essays/adequacy-ifrs-8-operating-segments-2153046>

Latest Chicago Format (16th edition)

Copy Reference
"Adequacy Of IFRS 8 Operating Segments", 28 November 2014, Accessed.17 May. 2024,
https://www.aceyourpaper.com/essays/adequacy-ifrs-8-operating-segments-2153046
   

Open, View, and/or
Download this Document
order custom essay example