Essay on Accounting Operating Segment

4147 Words Aug 4th, 2015 17 Pages
EC staff consolidated version as of 21 June 2012,
FOR INFORMATION PURPOSES ONLY

EN – EU IFRS 8

International Financial Reporting Standard 8
Operating Segments
Core principle
1

An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

Scope
2

This IFRS shall apply to:
(a)

the separate or individual financial statements of an entity:
(i)
(ii)

(b)

whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or that files, or is in the
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An operating segment may engage in business activities for which it has yet to earn revenues, for example, start-up operations may be operating segments before earning revenues.

,

EN - EU IFRS 8

6

Not every part of an entity is necessarily an operating segment or part of an operating segment. For example, a corporate headquarters or some functional departments may not earn revenues or may earn revenues that are only incidental to the activities of the entity and would not be operating segments. For the purposes of this IFRS, an entity’s post-employment benefit plans are not operating segments.

7

The term ‘chief operating decision maker’ identifies a function, not necessarily a manager with a specific title. That function is to allocate resources to and assess the performance of the operating segments of an entity. Often the chief operating decision maker of an entity is its chief executive officer or chief operating officer but, for example, it may be a group of executive directors or others.

8

For many entities, the

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