The tradeoff between relevance and comparability in segment reporting

IF 1.1 Q3 BUSINESS, FINANCE

Journal of Accounting Literature Pub Date : 2019-12-01 DOI:10.1016/j.acclit.2019.11.003

Lisa Hinson, Jennifer Wu Tucker, Diana Weng

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引用次数: 0

Abstract

The rule change for segment reporting in 1998 has arguably made segment reporting more relevant through the adoption of the management approach. Meanwhile, the management approach has resulted in a decrease in the comparability of segment income. We introduce firm-specific measures of changes in relevance and comparability due to the rule change. Our treatment firms experienced an increase in the relevance of segment reporting but a large decrease in the comparability of segment income; our benchmark firms barely experienced any changes in relevance and comparability. We examine earnings forecasts before vs. after the rule change issued by financial analysts—a major user group of segment reporting. Relative to benchmark firms, treatment firms’ analyst forecast error reductions around the segment disclosure event are not significantly different after the rule change than before the rule change, but treatment firms’ forecast dispersion reductions around the segment disclosure event are significantly larger after the rule change than before the rule change. These results suggest that despite the decrease in comparability, the new segment reporting rule has increased the decision usefulness of segment information by decreasing disagreement among analysts.

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分部报告中相关性和可比性之间的权衡

1998年分部报告的规则变更可以说通过采用管理方法使分部报告更具相关性。同时，这种管理方式导致了分部收入可比性的降低。我们介绍了由于规则变化而导致的相关性和可比性变化的公司特定措施。我们的治疗公司在分部报告的相关性方面有所增加，但在分部收入的可比性方面大幅下降;我们的基准公司在相关性和可比性方面几乎没有任何变化。我们研究了财务分析师(分部报告的主要用户群体)发布的规则变更之前和之后的收益预测。与基准公司相比，规则变化后，处理公司在行业披露事件前后的分析师预测误差减小幅度与规则变化前没有显著差异，但规则变化后处理公司在行业披露事件前后的预测离散度减小幅度明显大于规则变化前。这些结果表明，尽管可比性下降，但新的分段报告规则通过减少分析师之间的分歧，增加了分段信息的决策有用性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Accounting Literature BUSINESS, FINANCE-

CiteScore

6.50

自引率

0.00%

发文量

期刊介绍： The objective of the Journal is to publish papers that make a fundamental and substantial contribution to the understanding of accounting phenomena. To this end, the Journal intends to publish papers that (1) synthesize an area of research in a concise and rigorous manner to assist academics and others to gain knowledge and appreciation of diverse research areas or (2) present high quality, multi-method, original research on a broad range of topics relevant to accounting, auditing and taxation. Topical coverage is broad and inclusive covering virtually all aspects of accounting. Consistent with the historical mission of the Journal, it is expected that the lead article of each issue will be a synthesis article on an important research topic. Other manuscripts to be included in a given issue will be a mix of synthesis and original research papers. In addition to traditional research topics and methods, we actively solicit manuscripts of the including, but not limited to, the following: • meta-analyses • field studies • critiques of papers published in other journals • emerging developments in accounting theory • commentaries on current issues • innovative experimental research with strong grounding in cognitive, social or anthropological sciences • creative archival analyses using non-standard methodologies or data sources with strong grounding in various social sciences • book reviews • "idea" papers that don''t fit into other established categories.