Why do some companies bury weak performance in a “miscellaneous” bucket 🗂️ while others show you exactly where the money is made — or lost? 📉📊

In this episode 🎙️, we unpack IFRS 8 — the standard designed to force operational transparency.

This isn’t about textbook classifications. It’s about how management actually runs the business.

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Key subjects covered in this episode:

• The Management Approach 🧠

IFRS 8 follows the perspective of the Chief Operating Decision Maker (CODM).

If management reviews performance by division, region, or product line — that’s how reporting should look externally.

No artificial accounting segmentation. Reality wins.

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• The Three 10% Tests 📏

A segment is reportable if it meets any of these:

1️⃣ Revenue ≥ 10% of total segment revenue

2️⃣ Profit or Loss ≥ 10% of the relevant benchmark

3️⃣ Assets ≥ 10% of total segment assets

One trigger is enough.

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• The 75% Rule 📊

Even after applying the 10% tests, reportable segments must cover at least 75% of total external revenue.

If not, you keep adding segments until you hit 75%.

No hiding material business lines.

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• Aggregation Criteria 🔗

You can group segments — but only if they are economically similar (similar margins, risks, growth prospects, etc.).

Convenience is not a valid reason.

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• Entity-Wide Disclosures 🌍

Even if you have only one reportable segment, you still must disclose:

• Revenues by product/service

• Geographic information

• Non-current assets by location

Transparency doesn’t disappear with simplicity.

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• Major Customers 🎯

If a single customer generates ≥ 10% of total revenue, you must disclose that fact (without naming them).

Concentration risk must be visible.

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🔥 A Pro-Tip for your SOCPA Prep

The Profit or Loss 10% Test is a classic calculation trap 🚨.

Follow this method exactly:

1️⃣ Separate segments into profit-makers and loss-makers.

2️⃣ Sum profits separately.

3️⃣ Sum losses separately (ignore negative signs).

4️⃣ Take the greater of the two totals.

5️⃣ Any segment whose own profit or loss is ≥ 10% of that greater total is reportable.

Do not net profits and losses first.

If you net them, you distort the benchmark — and the entire answer collapses.

IFRS 8 isn’t about compliance.

It’s about revealing how management really sees performance — and forcing them to show it publicly.