For entities that operate in a variety of classes of business, geographical locations, regulatory or economic environments or markets, high quality management accounts are essential. They enable management to monitor performance, allocate resources and devise business and market strategies. IFRS 8 ‘Operating Segments’ requires much of this management information for public listed entities to be published externally so that investors, analysts and other users of entities’ financial statements can review an entity’s operations from the same perspective as management.

Our ‘Insights into IFRS 8’ series considers key implementation issues and provides interpretational guidance in certain problematic areas. We also include several examples illustrating the Standard’s requirements.

This introductory article summarises the requirements and scope of IFRS 8 and explains the key steps in determining reportable segments.