Do the requirements of IFRS 8 Operating Segments enhance the quality Assignment

Do the requirements of IFRS 8 Operating Segments enhance the quality of information available to financial statement users - Assignment Example IFRS 8 states that an operating segment is a component of any organization that engages in business activities that earn revenue. The entity’s operating results must also be regularly reviewed by the chief operating decision maker. In addition, the entity must have discrete financial information. In business, an operating segment is that an independent unit that produces discriminated revenue thus necessitating preparation of separate books of transactions. It helps companies to track their performance in different areas of the market (IFRS 8 website). The paper discusses the reasons why the provision of segmental information is useful, current requirements of IFRS 8 and how they differ with other past and present accounting standards. It also presents the evidence as to whether the current requirements increase the quality of information available to users of financial statements. A good number of market participants and stakeholders are usually interested in the disclosures of information regarding the operating segments of the company. The provision of segmental information ensures that users of financial statements access information relating to the firm’s past performance, their risks and returns so as to be able to make informed decision or judgment about the entity in entirety (Christian & LüDenbach, 2013, p. 451). It ensures that users of information easily access the information regarding performance and prospects of the particular part of the entity that which they are interested. The stakeholders need to consider separate prospects and performance of each sector so as to be able to estimate the performance of the entire enterprise fully. Provision of segmental information ensures transparency. Transparency is the cornerstone of any corporate financial reporting because analysts and other stakeholders require complete and accurate information to assess the growth and