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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Kaveri Foods Ltd has a board of seven members. The managing director, the chief operating officer and two whole-time directors meet monthly as an executive committee, which allocates resources to the business units and reviews their performance. The company's HR policy lists the CEO as the highest-ranking officer. For Ind AS 108, who is the chief operating decision maker (CODM)?

The executive committee performing the resource allocation and performance assessment function is the CODM. Ind AS 108 treats the CODM as a function rather than a specific title, and it may be a group of executive directors, so the CEO's rank alone is not decisive.

  1. AThe CEO, since the CODM must be the person with the highest title
  2. BThe function performed by the executive committee, which allocates resources and assesses segment performanceCorrect
  3. CThe non-executive directors, because they represent the shareholders
  4. DThe statutory auditor, because the auditor reviews segment disclosures

Explanation

Ind AS 108 says the CODM identifies a function, not necessarily a manager with a specific title. The function is to allocate resources to and assess the performance of operating segments. It may be a group of executive directors. Option 0 wrongly ties the CODM to a title.

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