Matrix-structured entities use judgment to determine their operating segments. Such entities should consider the importance of the factors that have led to the matrix structure (it did not happen without a sound business reason!!).
IFRS 8 para 8 states that the following factors should be considered when an entity is determining the set of components that constitutes its operating segments:
As long as discrete information is reviewed by the CODM. Typically, an entity’s research and development (R&D) function is a vertically integrated operation (see Operating segments – Vertically integrated operation), in which the R&D activities serve as an integral component of the entity’s business. The definition of operating segment envisages that part of an entity that earns revenue and incurs expenses relating to transactions with other components of the same entity may still qualify as an operating segment … Continue reading
Most entities will be able to identify their operating segments easily by reference to the definition. However, when this is not the case, for example if the chief operating decision maker (CODM) uses more than one set of segment information, other factors may enable the operating segments to be identified.