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Wiley IFRS: Practical Implementation Guide and Workbook, 3rd Edition by Liesel Knorr, Graham Holt, Abbas A. Mirza

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Chapter 39
OPERATING SEGMENTS (IFRS 8)

INTRODUCTION

The IASB issued IFRS 8, Operating Segments, in November 2006, effective for annual periods beginning on or after January 1, 2009. IAS 14, Segment Reporting, was the previous standard on segment reporting that was issued by the International Accounting Standards Committee (IASC), the IASB’s predecessor.
Since its issuance in 2006, IFRS 8 has already been amended by the following three IFRS:
• IAS 1 (as revised in 2007), effective date January 1, 2009.
• IASB’s annual improvements standard, “Improvements to IFRS 2009,” effective date January 1, 2010.
• IAS 24, (as revised in 2009), effective date January 1, 2011 (with earlier application permitted).
As a result of the IASB’s joint short-term convergence project with the US Financial Accounting Standards Board (FASB), which project was launched with the primary objective of reducing differences between IFRS and US GAAP, and based on research carried on by both standard setters, the IASB adopted the approach of the US Standard on segmental reporting, namely, SFAS 131, Disclosures about Segments of an Enterprise and Related Information, and revised its previous Standard on segment reporting.
The IASB believes that requiring entities to report segmental information using the approach prescribed by IFRS 8 (i.e., a “management approach”) allows the financial statement user to review segmental information from the “eyes of the management” as opposed to a “risks and rewards” approach under ...

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