IFRS 8 and ASC 280 are broadly aligned, with key differences.
From the IFRS Institute – September 05, 2025
Authors: Vaibhav Poddar, Ingo Zielhoff and Valerie Boissou
Segment reporting for US registrants, whether domestic or foreign, continues to be a focal point for the SEC. While the guidance in IFRS 81 and ASC 2802 is broadly aligned, there are a number of key differences. This article has been updated to reflect the issuance of a 2024 IFRS Interpretations Committee agenda decision related to IFRS 83, FASB’s recent amendments to ASC 280 introduced by ASU 2023-074, and updated remarks by the SEC staff.
Segment reporting has consistently been a hot topic for financial statement preparers, auditors, investors and regulators ever since the FASB first issued guidance on the subject in 1997. Much inspired by its US GAAP equivalent, IFRS 8 was published by the International Accounting Standards Board (IASB) in 2006 and has been in effect since 2009.
The objective of segment reporting is for public companies to disclose information about their operations that may not be obvious from the financial statements. It allows financial statement users to see through the eyes of management to understand how management views the operating results and financial position of the company’s reportable segments.
While segment reporting leverages information prepared for internal purposes, it remains challenging to apply and involves a number of key judgments. This topic has been subject to continuous SEC scrutiny over the years; domestic and foreign US registrants frequently receive comments from the SEC staff on their segment disclosures.
Under both IFRS 8 and ASC 280, a company’s financial results and financial position are disaggregated by reportable segment. Identifying reportable segments and segment information to disclose is a multi-step process, as presented below.
While IFRS 8 and ASC 280 are largely aligned, there are some key differences. This article summarizes these key differences in the four-step segment reporting process order noted earlier.
1. Identifying the CODM
The CODM refers to a function, rather than a title. The CODM represents the function that both assesses an operating segment’s performance and determines the resources allocated to the operating segment. Usually, the CODM is the highest level of management (e.g. CEO or COO) responsible for the company’s overall resource allocation and performance assessment, but the function of the CODM could be performed by more than one person (e.g. an executive committee or a management committee).
| IFRS Accounting Standards | US GAAP |
| There is no explicit requirement in IFRS® Accounting Standards to disclose the title and position of the individual or the name of the group or committee identified as the CODM. | New with ASU 2023-07 – Unlike IFRS Accounting Standards, a company is required to disclose the title and position of the individual or the name of the group or committee identified as the CODM. |
2. Identifying operating segments in matrix form of organization
Many companies, particularly multinational companies with diverse operations, manage their business components and report financial information to the CODM in more than one way. For example, when a company uses a ‘matrix’ form of organization, the reporting relationships are set up as a grid, rather than only by geography or only by products and services. Financial information in these structures have dual reporting relationships – e.g. to both a functional manager and a product manager.
| IFRS Accounting Standards | US GAAP |
| Companies that have a ‘matrix’ form of organization determine operating segments consistent with the objective of the accounting standard if more than one set of components is reviewed by the CODM. | Unlike IFRS Accounting Standards, companies that have a ‘matrix’ form of organization may determine operating segments based on products and services if more than one set of components is reviewed by the CODM. |
3. Aggregating operating segments and related disclosures
A company may aggregate operating segments when those segments have similar economic characteristics and meet certain other criteria; aggregation also needs to be consistent with the objective of the guidance. IFRS Accounting Standards and US GAAP have similar aggregation criteria but may differ in the level of disclosures required.
| IFRS Accounting Standards | US GAAP |
A company discloses the factors used to identify reportable segments and the judgments made by management in applying the aggregation criteria. The latter includes:
| Like IFRS Accounting Standards, a company discloses the factors used to identify reportable segments under US GAAP. However, unlike IFRS Accounting Standards, there is no explicit requirement to disclose the judgments made by management in applying the aggregation criteria under US GAAP. |
The SEC, in its comment letters, regularly inquires about how companies have identified their operating segments, including conclusions relating to aggregation of and how economic characteristics and other similarities are considered when operating segments are aggregated.
4. Disclosing measure(s) of segment profit or loss
Single measure or multiple measures
Companies are required to disclose a measure of profit or loss for each reportable segment. The reported segment measure(s) are the measure(s) used by the CODM for the purposes of making decisions about allocating resources to the segment and for assessing its performance. These measure(s) are not necessarily consistent with the principles used in the financial statements (i.e. IFRS Accounting Standards or US GAAP) – e.g. EBITDA.
| IFRS Accounting Standards | US GAAP |
| There is no explicit guidance in IFRS Accounting Standards on whether a company can report multiple measures of a segment's profit or loss if the CODM uses more than one measure to evaluate segment performance and allocate resources. | New with ASU 2023-07 - Unlike IFRS Accounting Standards, US GAAP contains explicit guidance that permits a company to report additional measures of a segment’s profit or loss that are used by the CODM to evaluate segment performance and allocate resources. |
Prior to ASU 2023-07, the SEC viewed IFRS 8 and Topic 280 to both require disclosure of only one measure of segment profit or loss. If the CODM used multiple measures, the measure disclosed was the one that management believed was most consistent with the measurement principles used in the financial statements. Any additional measures included in the segment note to the financial statements were considered non-GAAP financial measures by the SEC. Therefore, the SEC has historically objected to US registrants (whether domestic or foreign) disclosing more than one measure of segment profit or loss in financial statements prepared under either IFRS Accounting Standards or US GAAP.
Following the adoption of ASU 2023-07, the SEC has clarified that, under US GAAP, registrants may disclose more than one segment profit or loss measure in the segment note to the financial statements, as long as the measure that management believes is most consistent with the measurement principles used in the financial statements is also disclosed. Therefore, for US GAAP financial statements, reporting an additional segment profit or loss measure may be acceptable under certain conditions, because providing it as a result of ASU 2023-07 is compliant with Topic 280. There is no indication that the SEC’s historical views have changed for financial statements prepared under IFRS Accounting Standards.
See KPMG Hot Topic, SEC staff clarifies segment reporting disclosures and Issues In-Depth, Non-GAAP financial measures for further considerations on SEC rules related to non-GAAP measures and the interplay with segment reporting.
How the CODM uses the reported measures
| IFRS Accounting Standards | US GAAP |
| No similar requirement. There is no explicit guidance in IFRS Accounting Standards requiring disclosure of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. | New with ASU 2023-07– Unlike IFRS Accounting Standards, a company is required to disclose how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. |
5. Disclosing significant segment expenses
Companies are required to disclose certain amounts by reportable segment if included in the measure of segment profit or loss reviewed by the CODM, or otherwise regularly provided to the CODM.
| IFRS Accounting Standards | US GAAP |
For each reportable segment, a company discloses material items of income and expense, if they are included in the measure of segment profit or loss reviewed by the CODM (even if they are not separately provided to or reviewed by the CODM); or if they are regularly provided to the CODM (even if they are not included in that measure of segment profit or loss). In determining the material items of income and expense to be disclosed for each reportable segment, a company considers:
| For each reportable segment, a company discloses unusual items of income and expense, if they are included in the measure of segment profit or loss reviewed by the CODM (even if they are not separately provided to or reviewed by the CODM); or if they are regularly provided separately to the CODM (even if they are not separately provided to or reviewed by the CODM);. Unusual items of income and expense may differ from material items of income and expense disclosed under IFRS Accounting Standards. New with ASU 2023-07- Unlike IFRS Accounting Standards, US GAAP uses a significant segment expense principle requiring disclosure of significant segment expenses and other segment items regularly provided to the CODM and included in each reported measure of segment profit or loss. Under this principle, a company considers relevant qualitative and quantitative factors when determining whether segment expense categories and amounts are significant, which may differ from material items of income and expense disclosed under IFRS Accounting Standards. The composition of other segment items (the amount that reconciles segment revenue less significant segment expenses to segment profit or loss) is also provided. |
6. Disclosing measures of segment assets and liabilities
| IFRS Accounting Standards | US GAAP |
| A company reports a measure of total assets and liabilities for each reportable segment if such amounts are regularly provided to the CODM. | Like IFRS Accounting Standards, a company reports a measure of total assets for each reportable segment if such amounts are regularly provided to the CODM. However, unlike IFRS Accounting Standards, there is no requirement to disclose information about liabilities by reportable segment, even if such amounts are provided to the CODM. |
7. ‘Entity-wide’ disclosures
Certain entity-wide information disclosures are required, based on the financial information used to produce the company’s financial statements.
| IFRS Accounting Standards | US GAAP |
The following entity-wide disclosures are required:
| Entity-wide disclosure requirements under US GAAP are similar to the IFRS 8 requirements except in relation to noncurrent assets by geographical area. Unlike IFRS Accounting Standards, US GAAP requires disclosure of long-lived tangible assets by geographic area, which is narrower than the IFRS Accounting Standards requirement in respect of noncurrent assets and generally excludes intangible assets. |
8. Companies with a single reportable segment
Many companies have a single reportable segment. This may be, for example, because the CODM is effectively managing the business on a consolidated basis or because multiple operating segments are aggregated into one reportable segment.
| IFRS Accounting Standards | US GAAP |
| IFRS Accounting Standards are silent on whether the reportable segment disclosures apply to companies with a single reportable segment. | New with ASU 2023-07 - Unlike IFRS Accounting Standards, US GAAP contains explicit guidance requiring companies with a single reportable segment to provide segment disclosures, not only entity-wide disclosures. Applying Topic 280 in its entirety, poses unique challenges to these companies, including understanding why the company has only one reportable segment, identifying which segment profit or loss measure(s) to disclose, and avoiding duplicative information. |
KPMG resources:
In summary, while the spirit of segment reporting remains aligned under IFRS Accounting Standards and US GAAP, with the introduction of ASU 2023-07, US GAAP now has more disclosure requirements, especially around expense information and for companies with a single reportable segment.
Over the years, the SEC has expressed its views on how segment information should be reported, to enhance transparency and provide stakeholders detailed and relevant information. The SEC continues to monitor how US registrants, whether domestic or foreign, communicate their segment information and segment reporting remains on the watch for missing information and inappropriate non-GAAP information.
1 IFRS 8, Operating Segments
2 ASC 280, Segment Reporting
3 IFRS Interpretations Committee Update June 2024, Disclosure of Revenues and Expenses for Reportable Segments (IFRS 8 Operating Segments).
4ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment disclosures
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