The CODM label names a function in the segment-reporting model. A chief executive may perform it, another executive may perform it, or a group may share the relevant function under the actual facts. An organization chart begins the inquiry but does not finish it.
Evidence includes who receives discrete financial information and who decides resource allocations. It also includes the measures reviewed, decision timing, delegated authority, and resolution of disagreements. Titles, compensation plans, board minutes, operating reviews, and management packages should agree or the difference should be investigated.
Identifying the CODM does not make every report the CODM sees segment data. The operating-segment criteria and regular review of discrete financial information still require separate analysis.
ASC 280-10-50-5 defines the CODM by the resource-allocation and performance-assessment function. Document who makes those decisions, who can reverse them, and which information the decision maker uses. If a committee performs the function, preserve its members, authority, meeting record, and decision path instead of forcing one person's title into the conclusion.
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Understand this concept
- Explain why the CODM is identified from resource-allocation and performance-assessment functions, information flows, and governance evidence rather than one executive title.
Analyze this concept
- Analyze meeting cadence, decisions, participants, delegated authority, management reports, performance measures, and board materials to identify and document the CODM function.
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Build on these ideas
- Chief operating decision maker — Understand
To analyze this concept: Required. Identification must follow the decision function rather than begin with a presumed title.
- Financial reporting institution — Understand
To understand this concept: Helpful. The learner should distinguish an internal decision function from standard-setting and regulatory authority.
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Use this idea next
- Chief operating decision maker — Analyze
Required level here: understand. Required. Identification must follow the decision function rather than begin with a presumed title.
- Operating segment — Understand
Required level here: understand. Required. Regular review is evaluated from the identified resource-allocation and performance-assessment function.