Ind AS 108
Active
Operating Segments
Prescribes the disclosure of information about operating segments, mirroring IFRS 8's management approach and quantitative thresholds almost exactly, with the main Indian-specific interaction being with Schedule III of the Companies Act, 2013.
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Conceptual Framework Linkage
Identical management approach philosophy to IFRS 8
Ind AS 108 applies the IDENTICAL "management approach" as IFRS 8 – segments are defined by how the entity is ACTUALLY organised and managed internally (via reports reviewed by the Chief Operating Decision Maker), not an externally imposed classification, DIRECTLY carrying forward IFRS 8's own rationale into the Indian context.
HOW IND AS 108 MAPS TO THE FRAMEWORK
Relevance – reporting segments the way management actually monitors them – IDENTICAL to IFRS 8 Cost constraint – segment information derived from data management already produces internally – IDENTICAL to IFRS 8 CODM identification in Indian corporate structures – for many Indian companies (particularly those with a managing director or promoter-led executive structure), identifying the CODM function requires the SAME judgement-based analysis as under IFRS 8, though Indian corporate governance conventions (e.g. the Board's role under the Companies Act, 2013) sometimes inform this identification
Ind AS 108 does NOT introduce any INDIA-SPECIFIC segment identification concept – the management approach, CODM concept, and quantitative thresholds are reproduced essentially verbatim from IFRS 8.
Measurement principles – identical to IFRS 8
Framework conceptInd AS 108's application
Measurement basisWHATEVER basis management uses internally – may differ from Ind AS, IDENTICAL to IFRS 8
Reconciliation requirementMandatory, IDENTICAL to IFRS 8
No substantive divergence exists on measurement principles.
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Scope & Applicability
What Ind AS 108 covers
Ind AS 108 applies to entities with publicly traded debt/equity, or filing to issue such instruments – IDENTICAL scope trigger to IFRS 8.
Many LARGE unlisted Indian companies (e.g. certain NBFCs, or companies required to apply Ind AS due to net worth thresholds) MAY still voluntarily or be otherwise required to disclose segment information depending on specific listing/debt circumstances.
Key definitions you must know
Operating segment
IDENTICAL definition to IFRS 8 – a component with revenue/expenses, regularly reviewed by the CODM, with discrete financial information available.
Schedule III (Companies Act, 2013)
The statutory format prescribing the general structure of Indian companies' financial statements, operating alongside (and requiring consistency with) Ind AS 108's segment disclosures where applicable.
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Identifying Operating Segments
Identical three-part test to IFRS 8
A component qualifies as an operating segment ONLY if it: engages in revenue-generating business activities; has results regularly reviewed by the CODM; and has discrete financial information available – IDENTICAL to IFRS 8's own definition, with no Indian-specific modification.
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Aggregation of Segments
Identical five-factor test to IFRS 8
Segments may be aggregated if similar in nature of products/services, production processes, customer type, distribution methods, and regulatory environment – IDENTICAL five-factor test to IFRS 8.
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The Quantitative Thresholds – 10% Tests (with worked example)
Identical three tests to IFRS 8
Example 1: An Indian conglomerate's segment threshold test
An Indian group has 4 segments. Segment revenues: Textiles ₹120 crore, Chemicals ₹300 crore, Logistics ₹40 crore, Real Estate ₹90 crore. Combined revenue = ₹550 crore.
10% threshold = ₹55 crore. Textiles (₹120 crore), Chemicals (₹300 crore), and Real Estate (₹90 crore) all EXCEED this and are REPORTABLE. Logistics (₹40 crore) does NOT meet the revenue test alone (though it may still qualify via the profit/loss or assets tests, or via the 75% sufficiency test) – an IDENTICAL analysis to how IFRS 8 would apply.
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The 75% Reporting Sufficiency Test
Identical backstop to IFRS 8
If reportable segments' total external revenue is LESS THAN 75% of total consolidated external revenue, additional segments must be added until 75% is reached – IDENTICAL to IFRS 8.
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Schedule III Interaction
Consistency with the overall financial statement format
Schedule III of the Companies Act, 2013 prescribes the GENERAL format for Indian companies' Balance Sheet and Statement of Profit and Loss (classification of assets/liabilities, line item requirements) – Ind AS 108's segment disclosures are presented CONSISTENTLY with, but as a SEPARATE note disclosure alongside, this prescribed general format. This is a purely PRESENTATIONAL interaction, not a substantive difference in HOW segments are identified or measured.
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Entity-Wide Disclosures
Identical backstop disclosures to IFRS 8
Revenue by product/service, geographical revenue/non-current asset split (India domicile vs foreign), and major customer concentration (10%+ of revenue) – IDENTICAL requirements to IFRS 8, applying regardless of the entity's own internal segment structure.
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Disclosure Requirements
Identical disclosure requirements to IFRS 8
Factors used to identify reportable segments; products/services by segment Segment revenue, profit/loss, assets, liabilities (as reported to the CODM) Reconciliation of segment totals to consolidated Ind AS totals Entity-wide product/geographical/major customer disclosures
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Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
Identifying the CODM function correctly in complex Indian promoter-led/board structures Whether operating segments meet the aggregation criteria
SIGNIFICANT ESTIMATES
Allocating shared/corporate costs between segments
In Indian promoter-controlled group structures, identifying the CODM can require careful analysis of WHO genuinely reviews segment performance for resource allocation – sometimes the promoter/managing director individually, sometimes a formal management committee.
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Ind AS 108 vs IFRS 8 – Full Comparison
Comprehensive comparison table
FeatureIFRS 8Ind AS 108
Management approachCODM-based internal reportingIDENTICAL – no substantive divergence
10% thresholds & 75% testStandard mechanicsIDENTICAL
General financial statement format interactionVaries by local company lawSchedule III of the Companies Act, 2013 governs overall statement FORMAT, with segment notes presented consistently alongside it
Terminology"Operating segments," IFRSSame terminology; "Balance Sheet"/"Statement of Profit and Loss" per Companies Act conventions
Ind AS 108 is one of the MOST closely converged Ind AS standards – essentially IDENTICAL accounting substance to IFRS 8, with the only meaningful Indian context being the interaction with Schedule III's general presentation format, not the segment identification methodology itself.
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Statement Mapping
Where every Ind AS 108 disclosure lands
Disclosure itemLocationNotes
Segment revenue, profit/loss, assets, liabilitiesNotesMay use non-Ind AS internal measures
Reconciliation to consolidated totalsNotesMandatory bridging disclosure
Entity-wide disclosuresNotesRequired regardless of segment structure
Like IFRS 8, Ind AS 108 is entirely a DISCLOSURE standard.
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Related Standards
Cross-reference map
StandardConnection
IFRS 8The GLOBAL counterpart standard, near-identically converged
Schedule III (Companies Act, 2013)Governs the general financial statement format Ind AS 108's disclosures sit alongside
Ind AS 105Segments must be identified for held-for-sale/discontinued operations
Quick-reference glossary
Schedule III
The statutory format under the Companies Act, 2013 prescribing the general structure of Indian companies' financial statements.
CODM
Chief Operating Decision Maker – a function, not necessarily a specific title, identical concept to IFRS 8.
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Glossary
Operating segment
IDENTICAL definition to IFRS 8 – a component with revenue/expenses, regularly reviewed by the CODM, with discrete financial information available.
Schedule III (Companies Act, 2013)
The statutory format prescribing the general structure of Indian companies' financial statements, operating alongside (and requiring consistency with) Ind AS 108's segment disclosures where applicable.
Schedule III
The statutory format under the Companies Act, 2013 prescribing the general structure of Indian companies' financial statements.
CODM
Chief Operating Decision Maker – a function, not necessarily a specific title, identical concept to IFRS 8.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows