What are the requirements of ifrs 8, Financial Management

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What are the requirements of IFRS 8

IFRS 8 requires an organisation to adopt management approach to reporting on financial performance of its operating segments. General idea is that:

  • Information which would be reported would be what management uses internally for decision-making of segments (management accounts).
  • This consequently means that information can be different from what is used to prepare the income statement and statement of financial position.
  • IFRS thus requires explanations of the basis on which segment information is prepared and reconciliations to the amounts recognised in the income statement and statement of financial position.
  • Management approach to segmental reporting will enable users of financial statements to review operations from the management's point of view and see how organisation is controlled by senior decision makers.
  • Because this information is produced internally by management, it will incur few costs.
  • This will allow interim reporting of the segment information, as internally this is produced anyway for management accounts purposes.

 


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