The G100 supports the management approach for determining reportable segments. This approach is supported because it does not require an entity to report externally in a way that is inconsistent with the way in which the business is organised and structured. In addition, the benefits to users is enhanced since they can assess the performance of the segments of the business as they are structured and reviewed by management.

However, the G100 does not believe that the information reported must only be that reported internally to management. Management must make decisions about the performance of segments across the operations of the entity. On the other hand while users are making performance and allocation decisions these decisions are of a different order and nature to those made by management in relation to driving the operations of the entity.

While the management approach may impair comparability between entities the G100 believes that the principal focus should be on achieving comparability through time in respect of the reporting entity. The management approach can enhance this benefit in respect of a single entity provided that there is consistency in approach. On the other hand the scope for exercising judgement in applying IAS 14 does not necessarily result in consistency of approach across entities including those in the same industry.

Although the use of information reported internally has the advantage of providing a better understanding of the operations of the businesses through the eyes of management there is a potential for some entities to be competitively disadvantaged because they produce management reports in a different manner to their competitors. For example, segment profits in a particular market/product may be significant for an entity and, if reported internally, would require disclosure. However, a competitor in the same market, but with different reporting criteria, may not disclose such information. This issue is exacerbated for small entities in competition with large entities. In addition, under the proposals vertically integrated operations may, depending on internal reporting criteria, be identified as reportable segments.
 

It is still too early to determine whether the extent of convergence of corporate information systems will be enhanced with the implementation of IFRSs. It is expected that with enhanced technology and design of internal systems this will occur and that IFRS approaches will assume greater importance such that in time significant differences between measurement for internal and external reporting will disappear.

While the G100 supports the management approach for identifying reportable segments we consider that external reporting should be IFRS compliant.
 

The G100 believes that the current scope of IAS 14 should be retained. We do not consider that the case for extending the scope has been established.
 

The G100 supports the proposed approach to reconciliations at the group level. While this provides aggregate information about the nature and extent of the differences we believe that the costs of providing detailed segment based information, although potentially relevant to users, outweigh the benefits of the proposed approach.
 

The reasons for providing geographical disclosures is not adequately explained. The G100 believes that there is little benefit in disclosing information about the geographical location of assets in the absence of equivalent disclosure relating to the segment results.
 

The G100 supports the proposed consequential amendments to IAS 34.