FESA CONSOL

FlexSystem

IFRS 8: Operating Segments

Issues

Using a “managed approach” to identify, measure and disclose the financial performance of a company or a group of companies is a distinctive feature of this accounting standard compared with other accounting standards. The requirements are not only limited to dealing with a single company or a group of companies as a whole, but also includes the disclosure of financial performance for some of the material operating segments.

Key implementation issues are that the standard requires disclosure of financial performance for some of the material operating segments and these are reviewed by internal management and often involve a crossover between financial accounting and management accounting. More sophisticated internal control procedures over the preparation of financial statements is required and as a result control procedures and control environments are aligned with financial accounting for the purpose to comply with IFRS 8.

  

Expectations

Ease of integration of accounting systems and operational processes between financial accounting and management accounting is vital to ensure that management is using correct information and is in full compliance with the standard.

  

Solutions

Strong integration with Microsoft Excel enables FESA Consol to provide an integrated solution for the preparation of financial statements for both internal management plus stakeholders and financial accounting and management accounting tasks are executed using controlled procedures environment.

  

Benefits

Long term costs and risks associated with the Shareholder value can be increased gradually as results of increased quality and timeliness of financial information percolate through the organization.