The International Accounting Standards Board (IASB) issued on November 30, 2006, International Financial Reporting Standard (IFRS) 8 “Operating Segments”. Further, the IFRS is continuously working on the IASB’s work in its joint short-term convergence project with the US Financial Accounting Standards Board (FASB) to reduce differences between IFRSs and US generally accepted accounting principles (GAAP).

IFRS 8 arises from the IASB’s comparison of International Accounting Standard (IAS) 14 Segment Reporting with the US standard SFAS 131 Disclosures about Segments of an Enterprise and Related Information. IFRS 8 replaces IAS 14 and aligns segment reporting with the requirements of SFAS 131.

The IFRS requires an entity to adopt the ‘management approach’ to reporting on the financial performance of its operating segments.

The IASB believes that adopting the management approach will improve financial reporting. For example, it allows users of financial statements to review the operations through the eyes of management.

IASB Chairman David Tweedie pointed out,” IFRS adopts the management approach to segment reporting set out in SFAS 131. It therefore gives users of financial statements the opportunity to query how the entity is controlled by its senior decision maker”

IASB is committed to developing in the public interest a single set of high quality global accounting standards.

IFRIC’s principal role is to consider, on a timely basis within the context of International Financial Reporting Standards and the International Accounting Standards Board (IASB) Framework, accounting issues that are likely to receive divergent or unacceptable treatment in the absence of authoritative guidance, with a view to reaching consensus on the appropriate accounting treatment.

For more information please visit the following website: www.iasb.org