ASCG submits comment letter on the ED/2017/2

Today, the ASCG has submitted its comment letter on the Exposure Draft ED/2017/2 Improvements to Operating Segments (proposed amendments to IFRS 8 and IAS 34) to the IASB. In principle, the ASCG welcomes the IASB’s attempt to improve specific aspects of IFRS 8, such as the clarification that the chief operating decision maker (CODM) can be both an individual and a body, and that the CODM may also include non-executive members.

On the other hand, the proposal to supplement IFRS 8.7 with “involved in operational decisions” as the third feature to identity the CODM is criticized. This is due to the difficulties encountered when operational decisions and decisions on the allocation of resources are made by different persons (groups) or at different levels.

In addition, the ASCG considers the proposed disclosure requirement about why the segments reported differ from the segments identified in other sections of the annual reporting package to be included in IFRS 8 (and therefore the disclosure in the financial statements) as not suitable.

The ASCG has also articulated its view in EFRAG ‘s consultation process towards its comment letter to the IASB. (comment letter to EFRAG)