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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Kaveri Foods Ltd's chief executive officer allocates resources to its business units and reviews their performance every month. The board of directors meets quarterly only to approve results and does not allocate resources. A student says the CODM must be someone titled 'Chief Operating Decision Maker'. Which view is consistent with Ind AS 108?

The CODM is a function, not a title. It allocates resources to and assesses the performance of operating segments. Since Kaveri's CEO does both, the CEO is likely the CODM. The standard also permits a group of executive directors or others to be the CODM.

  1. AThe CODM must hold that specific title, so Kaveri has no CODM
  2. BThe CODM is the board in all cases because it approves results
  3. CThe CODM is a function of allocating resources and assessing performance, so here it is likely the CEOCorrect
  4. DThe CODM must be an individual manager and cannot be a group

Explanation

Ind AS 108 says the CODM identifies a function, not necessarily a manager with a specific title. The function is allocating resources to and assessing performance of operating segments. Often it is the CEO or COO, but it may be a group of executive directors or others. Here the CEO performs the function.

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