The Predictive Ability of Geographic Segment Disclosures by U.S. Companies: SFAS No. 131 vs. SFAS No. 14-Reference-Cited by-同舟云学术

The Predictive Ability of Geographic Segment Disclosures by U.S. Companies: SFAS No. 131 vs. SFAS No. 14

Published:2002-01-01 Issue:1 Volume:1 Page:31-44
ISSN:1542-6297
Container-title:Journal of International Accounting Research
language:en
Short-container-title:

Author:

Behn Bruce K.¹,Nichols Nancy B.²,Street Donna L.³

Affiliation:

1. University of Tennessee.

2. James Madison University.

3. University of Dayton.

Abstract

This research considers whether recent modifications to segment reporting adequately address analysts' concerns regarding the usefulness of geographic data. Forecast errors for models utilizing SFAS No. 131 geographic sales data are compared to forecast errors for models utilizing SFAS No. 14 geographic sales data. The results indicate a significant improvement in the predictive accuracy of geographic sales disclosures provided under SFAS No. 131. Additional analysis suggests this enhanced predictability may be associated with the revised requirements that companies report sales for the country of domicile and for each individually material country. Overall, our findings appear to support the FASB's argument that segment information by country is more informative and useful. Based on our findings, recommendations are presented regarding possible amendments to SFAS No. 131 that may further enhance the predictive ability of geographic segment data.

Publisher

American Accounting Association

Subject

Accounting,Business and International Management

Link

http://meridian.allenpress.com/jiar/article-pdf/1/1/31/2785208/jiar_2002_1_1_31.pdf

Reference27 articles.

1. American Institute of Certified Public Accountants (AICPA). 1994. Improving Business Reporting-A Customer Focus. Report of the AICPA Special Committee on Financial Reporting. New York, NY: AICPA.

2. Association for Investment Management and Research (AIMR). 1992. Financial Reporting in the 1990s and Beyond: A Position Paper of the Association for Investment Management and Research. Charlottsville, VA: AIMR.

3. The Predictive Ability of Geographic Segment Disclosures

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