MPs join European Parliament in segment standard row

‘This House finds IFRS 8, concerning disclosure of operating segments by multinational corporations, totally unacceptable because it gives company directors carte blanche to decide what they disclose and how they disclose it and does not require consistency of disclosure,’ the motion, put forward by Grimsby MP Austin Mitchell, said.

UK opposition to the standard follows political rows in Europe, where the European Parliament considered a resolution demanding that the EC conduct a full impact assessment. The motion has been deferred to September.

IASB sources have admitted they are baffled by the fierce opposition to IFRS 8, which was consulted on last year. The IASB believes the standard is a pawn in a power struggle between the EU and the EC.

But critics have maintained that the consultation was inadequate and that the standard is deeply flawed.

The standard concerns how segments are reported, with some critics hoping for a mandatory ‘country-by-country’ basis.

The FRC has also become concerned by the opposition to IFRS 8. If the standard hits the buffers it could be a significant blow to the US/UK convergence project.

An emergency meeting, attended by the Hundred Group of finance directors and the CBI among others, was held at the FRC to discuss IFRS 8 this week.

An IASB source said that the standard setter hoped to improve its relationships with stakeholders following the IFRS 8 bust up.