International Accounting Standards Board Review International Financial Reporting Standard 8 Essay

However, components with intercompany revenues would be operating segments. These departments with revenues and expenses would be operating segments even if they don 't have assets. The second requirement is that the operating results are regularly reviewed by the public entity 's chief operating decision makers (ASC 280-10-50-1). ASC defines the term "chief operating decision maker" (CODM), who allocates resources to and assess the operating results of the segment of an entity. CODM could be chief executive officer or a group of top executives. The third requirement is that its discrete financial information is available (ASC 280-10-50-1). To make resource allocation decision and assess performance, the CODM must have the detailed financial information about the component. When an equity method investee has met these three requirements, it could be an operating segment, even the investor doesn 't control over the investee. Besides equity method investees, corporate divisions which meet the three requirements could be considered as operating segments (ASC 280-10-55-3). When determining operating segments, discontinued operations should be also considered. Since discontinued operation is a component of an entity as defined under ASC 205 205-20-45-1, it may be an operating segment.

IFRS is form with a mission to be achieved which is produce a transparency, accountability and efficiency to the financial market around the world (Anon., 2016).

Ankarath, N., Ghosh, T.P., Alkafaji, Y. A., & Mehta, K. J. (2010). Understanding IFRS Fundamentals: International Financial Reporting Standards.

The International Financial Reporting Standards (IFRS) is the accounting framework used by the European Union, Japan, Canada, and other world economic leaders. The IFRS is based on the tenets of understandability, reliability, and comparability. It is based off the International Accounting Standards (IAS) and had the opportunity to be built from accounting ideas and principles used across the world. In recent years it also has had the chance to look at the United States Generally Accepted Accounting Principles (GAAP) and modify the rules to enhance clarity and consistency, intentionally setting itself apart from U.S.

Operating Segments specifies the use of a ‘through the eyes of the management’ approach to an entity’s reporting of information

This report will provide an overview as to what Segment Reporting is and how is it reported in the annual reports. This report will also touch basis on issues involved in allowing the management to measure the different operating segments. A brief discussion on how entity wide disclosures need to be made for major customers under AASB 8. To get a better understanding on segment reporting, we have compared the annual reports of Telstra Group and BHP Billiton, to view the different approaches or similarities in reporting segment information.

With complete notion and awareness of how each country has their set of rules, “the goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements” (Rouse, 2011). This view is meant to provide general guidelines, as well as international comparisons through conventional and edifying means. To bring broader and vivid objectives, IFRS replaced IAS, the older standards, in order to bring a more comprehensive and simplified accounting procedures.

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

They have two operating sectors: automotive and financial services. Within these sectors, their business is divided into reportable segments based upon the organizational structure that they use to evaluate performance and make decisions on

Under the lead of the IASB, countries have implemented or are in the process of adopting IFRSs as they seek to develop a single set of high quality, understandable, enforceable and globally recognised financial reporting standards based on clear articulated principles (IFRS Foundation, 2014). Unfortunately regulations have failed to achieve the desired outcome for a number of reasons. Firstly argued by Elliott and Elliott (2012) information overload is a key factor, as they state standards are too detailed when rule-based and too vague when principle-based leading to a lack of clarity and increased confusion, which in turn, leads them to question the usefulness of IFRS. Secondly, the business environment occurs at the rapid pace with millions of transactions taking place around the world. As business develops and becomes increasingly complex, the legislation process too becomes prolonged when revising outdated or implementing new standards. Lastly, professional judgement is required if there is no standard created for a particular transaction or if a particular standard requires the use of judgement i.e. IFRS 15 – Revenue from contracts with customers. According to IFRS, income can be split into revenue and gains, however defined, one accountant may deem a certain transaction as revenue whereas another accountant may see it as a gain. As professional judgement is required, it is important to note the IASB framework should be consulted

IFRS focus on providing the reliable, comparable and connected accounting information to help the internal or external users to understand the financial performances of companies from different countries. The adoption of IFRS could augment the transparency of information and ameliorate the quality of financial reporting.

With the globalization of international trades, it is necessary to design a common accounting language to compare the financial performance of companies from different countries. For this reason, International Accounting Standard Board (IASB) publish the International Financial Reporting Standards (IFRS) which are principle-based in order to improve the quality of financial reporting and to harmonize accounting standards in 2001.

Assists preparers of financial statements to develop consistent policies whenever and wherever no IFRS standard applies to a particular transaction.

The International Financial Reporting Standards (IFRS) have made an impact on the foundations of accounting, resulting in a different stance from the prior UK GAAP. Some of the more noticeable changes included; the increase of government resources being allocated to the standard. Companies will be required to provide all information of the incoming and expenditure of all money and assets under the new regulations. The presentation and terminology were altered in the current “Income Statement” and “Statement of Financial Position” leading to a change of some aspects on the budgets and estimates. “Fair value”; the unbiased evaluation of an assets potential market

Further purposes of the CF are to assist both the preparers of financial statements in applying the IFRS and assisting auditors on providing an opinion on an entity after evaluating whether the financial statements comply with the IFRS.