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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Kaveri Textiles Ltd's board consists of executive directors who jointly decide resource allocation to its divisions and review their performance monthly. The company has a CEO with the title 'Managing Director' who does not individually allocate resources. Who is the chief operating decision maker (CODM) under Ind AS 108?

The CODM is the group of executive directors. Ind AS 108 treats the CODM as a function of allocating resources and assessing segment performance, not a specific title, and expressly allows it to be a group of executive directors or others.

  1. AThe Managing Director, because the CODM must be the CEO
  2. BThe statutory auditor, since the auditor assesses performance
  3. CThe group of executive directors performing the allocation and assessment functionCorrect
  4. DNo CODM exists because there is no individual with that title

Explanation

Ind AS 108 states that CODM identifies a function, not necessarily a manager with a specific title. The function is to allocate resources to and assess performance of operating segments. It may be a group of executive directors. Option A is wrong because the title does not decide it.

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