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CA Final · Financial Reporting · Ind AS 108 Operating Segments

Vihaan Industries Ltd has a board of executive directors who jointly allocate resources and assess the performance of the Pharma, Chemicals and Packaging businesses. The company has no officer designated 'Chief Operating Decision Maker'. Which statement is correct under Ind AS 108?

The group of executive directors can be the CODM. Ind AS 108 treats the chief operating decision maker as a function of allocating resources to and assessing the performance of operating segments, not a specific title, and it may be a group of executive directors.

  1. ANo CODM exists, so segment reporting is not required
  2. BOnly the CEO can be the CODM, so the CEO must be identified
  3. CThe CODM is the Company Secretary, who prepares the reports
  4. DThe group of executive directors can be the CODM because the term identifies a function, not a specific titleCorrect

Explanation

Ind AS 108 says the CODM identifies a function, not necessarily a manager with a specific title. That function is to allocate resources to and assess performance of the segments. It may be a group of executive directors. Option B is wrong because the CEO or COO is only a common example.

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