4.6 Segment Reporting

The general framework of the segment reporting guidance in both IFRS 8 and ASC 280 is fundamentally the same in that both standards are built upon the “management approach” and the determination of operating and reportable segments is based on the same principles. Both IFRS 8 and ASC 280 require segment disclosures to be based on the internal reports that the entity’s chief operating decision maker (CODM) regularly reviews to allocate resources and assess performance. Before the adoption of ASU 2023-07, there were limited differences between certain segment disclosure requirements in IFRS and U.S. GAAP. However, the ASU introduces several new disclosure requirements, including those for significant segment expenses, other segment items, and CODM disclosures, which are noted in the table below. In addition, the ASU expands the disclosure requirements in interim financial statements and includes a requirement for single reportable segment entities to provide all required segment disclosures. Further, ASU 2023-07 permits the disclosure of more than one segment performance measure.

Topic	IFRS Accounting Standards (IFRS 8)	U.S. GAAP (ASC 280)
Entity-wide disclosures of long-lived assets by geography	Noncurrent assets are defined as assets that do not meet the definition of a current asset. Therefore, they would include intangible assets.	Long-lived assets within the entity-wide disclosures do not include intangible assets.
Entities with a matrix form of organization	An entity is required to identify operating segments on the basis of the “core principle” regardless of the form of organization used. Under IFRS 8, the core principle is that operating segments must be identified in a manner that enables users of the financial statements “to evaluate the nature and financial effects of the business activities in which [the entity] engages and the economic environments in which it operates.” Management will therefore be required to exercise judgment in determining which of the bases of segmentation satisfies this objective.	An entity with a matrix form of organization is required to determine operating segments on the basis of products and services rather than on the basis of geographical components or other information.
Aggregation disclosures	An entity is required to disclose the factors it used to identify its reportable segments. There is no requirement to disclose the judgments made by the entity in applying the aggregation criteria.	An entity is required to disclose the factors it used to identify its reportable segments and the judgments made by management in applying the aggregation criteria.
Significant segment expenses	Identification and disclosure of significant segment expenses and other segment items are not required. However, paragraph 23(f) of IFRS 8 requires an entity to disclose material items of income and expense that are disclosed in accordance with paragraph 97 of IAS 1 if the items are either (1) included in the measure of segment profit or loss reviewed by the CODM or (2) otherwise regularly provided to the CODM, even if not included in that measure of segment profit or loss.	An entity is required to disclose significant segment expenses by reportable segment if they are both (1) regularly provided to the CODM and (2) included in each reported measure of segment profit or loss. Disclosures are required on both an annual and interim basis.
CODM-related disclosures	There are no specific CODM-related disclosure requirements.	An entity is required to (1) disclose the CODM’s title and position on an annual basis and (2) provide an explanation of how the CODM uses the reported measure(s) and other disclosures.
Other segment Items	There is no specific guidance on other segment items other than in paragraph 23(f) of IFRS 8.	ASC 280-10-50-26B requires entities to “disclose for each reportable segment an amount for other segment items,” which represents “the difference between reported segment revenues less the segment expenses . . . and reported segment profit or loss.” The other segment items amount that must be disclosed is calculated as segment revenue minus separately disclosed significant segment expenses, minus the reported segment profit or loss measure for each reportable segment. Entities will need to provide a qualitative disclosure describing the composition of such items.