IFRS 8 Identifying operating segments – There are four key steps. Entities will need to:
- Identify the Chief Operating Decision Maker (CODM) (group/team/individual).
- Identify their business activities (which may not necessarily earn revenue or incur expenses).
- Determine whether discrete financial information is available for the business activities.
- Determine whether that information is regularly reviewed by the CODM.
Identifying the CODM and the components that are regularly reviewed by the CODM to make decisions can be difficult. It is also important to reassess regularly the identification of the CODM, particularly following a business reorganisation, acquisition or disposal. IFRS 8 Identifying operating segments