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Segment Reporting

Meeting summaries and observer notes

 IASB September 2006


The Board discussed the following issues:

  • Possible departures from the management approach in SFAS 131
  • The level of reconciliations between segment information and GAAP information
  • Disclosure of geographical information, including issues raised by the Publish What You Pay campaign
  • Consequential amendments to IAS 34 Interim Financial Reporting
  • Voluntary disclosure of segment information not in accordance with the IFR
  • Possible departures from the management approach

The Board decided that the IFRS should not define the measures of segment revenues, segment expenses, segment results, segment assets and segment liabilities that are required to be disclosed. In addition, the Board decided that all segments should disclose measures of segment profit or loss and total assets regardless of whether those measures are reviewed by the chief operating decision maker. Further, the Board decided that information about segment liabilities should be disclosed if such information is regularly reviewed by the chief operating decision maker.


Level of reconciliations

The Board decided that reconciliation to IFRS amounts should not be required at the individual segment level.


Disclosure of geographical information

The Board decided that issues raised by the Publish What You Pay campaign relating to country-by-country disclosures should not be addressed in the IFRS on operating segments. The Board decided that a sub-group of Board members should discuss the issues with relevant bodies such as the IASC Foundation Trustees, the World Bank, the IMF, the UN, the International Public Sector Accounting Committee and the Financial Stability Forum to determine the best way to address the issues. The Board decided to retain the disclosure requirements of SFAS 131 relating to geographical information.


Consequential amendments

The Board decided to proceed with the consequential amendments to IAS 34 Interim Financial Reporting. The Board also decided that the consequential amendments to paragraph 16(g) of IAS 34 should clarify that the additional interim information on profit and loss items should be disclosed only if the specified amounts are included in the measure of segment profit or loss reviewed by or otherwise regularly provided to the chief operating decision maker.


Voluntary disclosure of segment information not in accordance with the IFRS

At its meeting in July, the Board tentatively decided that if an entity that is not required to apply the IFRS chooses to disclose segment information that does not comply with it, it should disclose that the segment information does not comply with the IFRS. At this meeting, the Board further decided that such disclosures should not be referred to as segment information.


Minor issues on ED 8

The Board decided that:

  • The effective date should be 1 January 2009 in accordance with the recently announced IASB policy.

Early adoption of the IFRS should be allowed before its effective date.

  • The guidance in EITF 04-10 should be included in paragraph 13 of the IFRS.
  • FASB Q&A 131 – Segment Information: Guidance on Applying Statement 131 should not be included in the IFRS.
  • The wording used in ED 8 to exempt entities from disclosures should not be amended to ‘impracticable’.
  • The IFRS should include an appendix of defined terms to make it consistent with other IFRSs.
  • The quantitative thresholds for determining reportable segments should not be changed.
  • The last sentence of paragraph 9 should be deleted to allow matrix form organisations to report segment results in a manner consistent with the management approach.
  • Paragraph 12 should make clear the ranking between aggregation criteria and quantitative thresholds.
  • It is unnecessary to clarify that the aggregation of segments should be considered in terms of a single currency.
  • The footnote to paragraph 2 of IFRS 5 should be added to paragraph 23(b) of the ED to define non-current assets based on liquidity presentation.

Date: 9/19/2006