4.6 Segment Reporting
As shown in the table below, under IFRS Accounting Standards, operating
segments are identified on the basis of the “core principle” regardless of the form of
organization used, while under U.S. GAAP, operating segments are identified on the basis
of products and services.
Changing Lanes
In November 2023, the FASB issued ASU 2023-07 to enhance segment
disclosures for all entities required to report segment information in accordance
with ASC 280. The FASB decided to retain all existing segment disclosure
requirements in ASC 280, including but not limited to disclosures about significant
segment expenses. The ASU’s amendments are incremental to those requirements and “do
not change how a public entity identifies its operating segments, aggregates those
operating segments, or applies the quantitative thresholds to determine its
reportable segments.”
The amendments in ASU 2023-07 are effective for all public entities
for fiscal years beginning after December 15, 2023 (e.g., for calendar-year-end
public entities, annual periods beginning on January 1, 2024), and interim periods
within fiscal years beginning after December 15, 2024 (e.g., for calendar-year-end
public entities, interim periods beginning on January 1, 2025). Early adoption is
permitted; see Section
1.9 of Deloitte’s Roadmap Segment
Reporting for further information about the ASU.
When an entity adopts ASU 2023-07, there will be differences between the guidance in
U.S. GAAP and IFRS Accounting Standards because the IASB decided not to proceed with
the amendments proposed in its 2017 exposure draft on improvements to IFRS 8. Such
differences are not included in the tables in this section.
|
Topic
|
IFRS Accounting Standards (IFRS 8)
|
U.S. GAAP (ASC 280)
|
|---|---|---|
|
Entity-wide disclosures of long-lived assets by geography
|
Under IFRS Accounting Standards, 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.
|