The International Accounting Standards Board (IASB) has published ED 8 Operating Segments for public comment proposals to improve segment reporting.

The proposals mark another step towards convergence of international and national standards by continuing the IASB's work in its joint-short-term convergence project with the US Financial Accounting Standards Board (FASB) to reduce differences between the IASB's International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).

ED 8 results from the IASB's comparison of International Accounting Standard (IAS) 14 Segment Reporting with the US standard SFAS 131 Disclosures about Segments of an Enterprise and Related Information. The proposed IFRS would replace IAS 14 and align segment reporting with the requirements of SFAS 131.

ED 8 would require an entity to adopt the "management approach" to reporting on the financial performance of its operating segments. Generally, the information to be reported would be what management uses internally for evaluating segment performance and deciding how to allocate resources to operating segments. Such information may be different from what is used to prepare the income statement and balance sheet. The proposals would therefore require explanations of the basis on which the segment information is prepared and reconciliations to the amounts recognised in the income statement and balance sheet.