IFRS 8 Operating Segments post-implementation review –
EFRAG survey
Introduction
The International Accounting Standards Board (‘the IASB’) has launched a postimplementation review of IFRS 8 Operating Segments, the outcome of which will
contribute to future agenda decisions. To contribute to the review EFRAG is gathering
evidence from constituents.
In addition to this survey EFRAG is organising outreach events in partnership with
National Standard Setters across Europe, and sessions in association with user
organisations, where additional evidence will be gathered. At these events themes
identified from survey responses will be further explored. If you would like find out more
information about these events, including locations, please see the EFRAG website or
contact your National Standard Setter.
Responses may be shared with IASB staff and will be summarised by EFRAG staff and
included in a consolidated feedback statement, which will be published on the EFRAG
website. The consolidated feedback statement will list categories of respondents, but no
specific individuals or organisations will be identified and any identifying information will
be kept confidential.
Objective and format of the survey
The survey contains open questions for participants based on their experiences preparing
and auditing information prepared under IFRS 8, grouped into the themes identified by
the IASB in their Request for Information. If a question is not relevant, please indicate
this.
EFRAG will use answers to this survey to assist in preparing its response to the IASB and
also as the basis for discussion at each of the outreach events. Responses would be
preferred by 30 October 2012.
Background to IFRS 8
Most entities started providing IFRS 8’s segment disclosures in 2009. Before applying
IFRS 8, entities using IFRS followed another standard (IAS 14) that had different
requirements. The main differences between IFRS 8 (used today) and IAS 14 (used
previously) are:
Identifying reportable segments:

IAS 14 identified reportable segments on the basis of the goods and services
provided to customers, or by geographical region; and

IFRS 8 identifies reportable segments on the basis of the internal reporting to the
chief operating decision maker in allocating resources. This allows investors and
analysts to see the company from management’s perspective.
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IFRS 8 post-implementation review – EFRAG survey
Measurement of amounts reported:

IAS 14 measured each line item on the basis of IFRS; and

IFRS 8 measures each line item on the basis of how it is reported to the chief
operating decision maker (which may be different to the IFRS amounts).
Consistency with IFRS financial statements:

IAS 14 required line items, such as profit, to be the same as defined in the IFRS
financial statements; and

IFRS 8 does not define line items for segment reporting, but does require an
explanation of how the line items were determined.
The IASB also changed to IFRS 8 to achieve convergence with US GAAP. In developing
IFRS 8, the IASB thought that using the management perspective would help users
understand the risks that the business faces each day and so that they could better
predict future operating results and cash flows.
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IFRS 8 post-implementation review – EFRAG survey
Questions
Your details and contact information
Please describe the nature and extent of your experience with IFRS 8 and the
capacity in which you are responding to this survey
The bold headings below follow the themes in the IASB’s Request for Information, which
reflects the discussions at the time IFRS 8 was developed and subsequent commentary.
To the extent that an individual question is not relevant to your own experience, it is not
necessary to provide an answer.
The effect of using the management approach to identifying operating segments
1
What was the impact of the change to IFRS 8 on communication with investors?
2
What was the implications for consistency with management’s discussion and
analysis in annual reports?
3
What was your experience in identifying the chief operating decision maker?
4
What was your experience in identifying operating segments?
5
Are you aware of instances in which not all material activities are included in an
operation segment? If so, please explain.
6
Have the operating segments reported under IFRS 8 changed over time? If so, why
has the segmentation changed?
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IFRS 8 post-implementation review – EFRAG survey
7
To what extent do you compare operating segment disclosures to those of
competitors?
8
Do the operating segments reflect the organisation chart? Please explain.
9
Please describe your experience in aggregating operating segments into reportable
segments.
10
Are there any other effects of using the management approach to identify operating
segments you would like to tell us about?
The effect of using a management determined measurement basis rather than IFRS
11
Is the segment information based on full IFRS? If so, please go to question 16.
12
Please describe the differences between the management measurement basis and
full IFRS.
13
How do you communicate differences between the management measurement
basis and full IFRS to users of the financial statements?
14
How does the relevance and reliability of the management measurement basis
compare to IFRS?
15
Are there any other aspects regarding the use of the management measurement
basis that you would like to comment on?
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IFRS 8 post-implementation review – EFRAG survey
The effect of limiting required line item disclosures to only those regularly
reviewed by the chief operating decision maker
16
Is there information that the chief operating decision maker receives that is not
included in the segment information reported under IFRS 8? Please describe the
nature and extent of this information.
17
Is there information about operating segments that is currently not required under
IFRS 8 but that is regularly provided to users? If so, please describe that
information and what you believe it is used for.
18
Are there any other effects of limiting line item disclosures to only those regularly
reviewed by the chief operating decision maker that you would like to tell us about?
The disclosure requirements of IFRS 8
19
IFRS 8 requires disclosure of material line items per segment and material
reconciling items. Are there any such items that are significant but not necessarily
material? Please describe.
20
Is there significant segmental information that is currently not required to be
disclosed by IFRS 8? Please describe.
21
Are there any disclosure requirements in IFRS 8 that are difficult to understand or
apply in practice? Please describe.
22
Users have commented that reconciliations between the total of reported segments
and an entity’s IFRS financial statements are difficult to understand and interpret. Is
this an issue that you could comment on?
23
Is there anything else you would like to tell us about the disclosure required by
IFRS 8?
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IFRS 8 post-implementation review – EFRAG survey
Implementation experience
24
Could you please comment on the costs, benefits and practical aspects of the
implementation of IFRS 8?
Interaction with other standards
25
Do you have any comments on the interaction between operating segment
requirements in IFRS 8 and the definition of cash-generating units in IAS 36
Impairment of Assets (paragraph 80(b) of IAS 36)?
26
Do you have any comment on the interaction of operating segment information with
the new requirement, in IFRS 11 Joint Arrangements, to apply the equity method of
accounting to joint ventures?
Other information
27
Are any other matters that you would like to bring to our attention?
28
Do you have any examples of segment reporting that you believe are particularly
noteworthy?
Returning the survey
Please return this completed survey to benjamin.reilly@efrag.org by 30 October 2012.
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