Which companies are required to prepare financial statements according to IFRS 8?

IFRS 8, which relates to operating segments, requires that entities report financial information in a manner that reflects how their chief operating decision maker allocates resources and assesses performance. The standard primarily applies to publicly accountable entities as defined by the International Accounting Standards Board (IASB).

Quoted companies, being publicly traded entities, typically fall under the category that is required to prepare financial statements in accordance with IFRS. These entities must provide segment information that helps users of the financial statements understand the different areas of business that exist within the entity and how they contribute to overall performance.

While private companies can choose to adopt IFRS 8, they are not mandated to do so, and small companies are often subject to different financial reporting standards, potentially the IFRS for SMEs, rather than full IFRS. The option indicating that no specific companies are required does not reflect the key focus of IFRS 8, as the standard is specifically aimed at those entities whose securities are traded in a public market. Thus, quoted companies have an obligation under IFRS 8 to furnish this information in their financial statements.