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Ind AS 108 uses which approach for identifying operating segments?
AManagement approach — segments are identified the way the CODM internally organises, reviews and resources the entity
BRisk-and-return approach — segments are identified by similarity of risks and returns
CLegal-entity approach — each subsidiary is treated as a separate segment by default
DGeographical-area approach — each location is automatically a distinct segment
Answer & Solution
Correct answer: A. Management approach — segments are identified the way the CODM internally organises, reviews and resources the entity
Ind AS 108 is built on the management approach: segments are reported the way the CODM internally organises the entity, so users can see it "through the eyes of management." This is a deliberate departure from AS 17, which used the risk-and-return approach to identify business and geographical segments.
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