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CMA Final · Corporate Financial Reporting · Operating Segments (Ind AS 108)

Under Ind AS 108, which of the following statements about the 'chief operating decision maker' (CODM) is correct?

The CODM is a function that allocates resources to and assesses the performance of the operating segments. It need not carry a specific title. Often it is the CEO or COO, but it may equally be a group of executive directors or others.

  1. AIt must be the Chief Executive Officer of the entity, since only that title carries the authority to allocate resources
  2. BIt is a function, which allocates resources to and assesses the performance of operating segments, and may be a group of executive directorsCorrect
  3. CIt is always the statutory auditor, who assesses the performance of each segment independently
  4. DIt is the board's audit committee, whose role is limited to reviewing segment disclosures

Explanation

Ind AS 108 treats the CODM as a function, not a person with a specific title. The function is to allocate resources to and assess the performance of operating segments. It is often the CEO or COO but may be a group of executive directors or others, so insisting on the CEO alone is wrong.

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