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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Kaveri Pharma Ltd's executive committee comprises the Managing Director, the Chief Financial Officer and two whole-time directors. The committee jointly decides how resources are allocated to the business divisions and reviews each division's performance. No one individual carries the title 'Chief Operating Officer'. Under Ind AS 108, who is the chief operating decision maker?

The executive committee is the chief operating decision maker. The term identifies a function, not a specific title, namely allocating resources to and assessing the performance of operating segments, and Ind AS 108 says this may be performed by a group of executive directors.

  1. AThe Managing Director alone, because the title of CEO is required
  2. BThe CFO, because the function relates to financial performance
  3. CNo CODM exists because there is no manager with the specific title
  4. DThe executive committee, because CODM identifies a function of allocating resources and assessing performance, which may be performed by a group of executive directorsCorrect

Explanation

Ind AS 108 says the term 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 performed by a CEO, COO or a group of executive directors. The committee performs this function here, so the title-based options are wrong.

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