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ACCA Strategic Professional · Strategic Business Reporting (International) · Analysis and interpretation of financial and non-financial information and measurement of performance

Candor plc reports to its CODM a segment profit measure that excludes head-office pension costs and uses management's own cost allocations, which differ from IFRS-based consolidated figures. Which statement correctly reflects IFRS 8 requirements?

The entity discloses the segment profit measure as reported to the CODM, even if it departs from IFRS, and must reconcile segment totals for revenue, profit or loss, assets and liabilities to the entity's IFRS figures, and explain the measurement basis used.

  1. AThe segment measure reported must be the one used internally by the CODM, with reconciliations to the entity's IFRS totals for revenue, profit or loss, assets and liabilitiesCorrect
  2. BThe segment measure must be restated to IFRS recognition and measurement rules before disclosure
  3. COnly the total of segment profits is disclosed, without any reconciliation
  4. DItems excluded from the CODM's measure must be shown as part of segment profit

Explanation

IFRS 8 requires segment amounts to be measured on the basis reported to the CODM, even if that is not IFRS-compliant. The entity must then reconcile segment totals to the corresponding entity amounts and explain the basis of measurement. Restating to IFRS is not required.

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