ACCA Strategic Professional · Strategic Business Reporting (International) · Analysis and interpretation of financial and non-financial information and measurement of performance
Halden Group previously reported segments by product (Alpha, Beta, Gamma). From this year the CODM reviews results by region (North, South) following a reorganisation. Management proposes to present the new regional segments for the current year only, saying comparatives are 'impracticable' without any assessment. Which response is correct under IFRS 8?
Prior-period segment information must be restated to the new structure unless it is unavailable and the cost to develop it would be excessive, and that must be genuinely assessed. The entity must also disclose whether comparatives were restated, and if not, give current data under both structures.
- AComparatives must be restated for the new structure unless the information is not available and the cost to develop it would be excessive, and the entity must disclose whether comparatives were restatedCorrect
- BComparatives are never restated as segment changes are a change in estimate applied prospectively
- CComparatives must be restated in all cases, with no exception
- DComparatives are restated only if the 10% thresholds are still met under the old structure
Explanation
IFRS 8 requires restatement of prior-period segment information after an internal reorganisation unless the information is unavailable and too costly to develop. Management cannot simply assert impracticability. If not restated, the entity must disclose current-period segment data under both the old and new structures. The proposal also raises an ethical concern about transparency.
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