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.