The CODM might use more than one measure of profit, assets or liabilities for the purpose of assessing performance and allocating resources. In these circumstances, the segment measures to be reported should be those that are determined in accordance with the measurement principles most consistent with those used in measuring the corresponding amounts in the entity’s financial statements. For example, if the CODM uses both net profit excluding unrealised financial instrument gains or losses and net profit before tax, the latter measure would be more consistent with the profit figures used in the financial statements. If each measure is equally consistent with the measurement principles reflected in the corresponding amount that appears in the consolidated financial statements, the measure to be reported externally would be the measure that is most consistent with the core principle in IFRS 8. Although IFRS 8 requires this basis to be used to decide which of the two measures should be reported, there does not appear to be anything that prevents the entity from reporting both measures if it wishes to do so.

Two measures of profit used for each operating segment Entity A provides the CODM with two measures of profitability by operating segment: operating profit, and profit before income tax expense. Segment operating profit is determined based on the same measurement principles that are used in the preparation of consolidated operating profit. However, segment profit before income tax expense includes certain internal ‘cost of capital’ charges, that are eliminated in determining the consolidated profit before income tax expense. In this situation, segment operating profit would be the measure reported externally, because this measure is the most consistent with its corresponding amount in the entity’s financial statements. In addition, disclosure would need to be made for interest income and expense, because that information is included in the profit before income tax expense measure provided to the CODM.