{"title":"Financial Analysis in Banking: The Challenge of Segment Reporting*","authors":"Long T. Bui, Michel Magnan, Rucsandra Moldovan","doi":"10.1111/1911-3838.12264","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>An equity analyst at Q&M Independent Research Corporation is assessing the financial and business prospects of two Canadian banks: Bank of Montréal and Canadian Imperial Bank of Commerce. Relying on recent information provided in the financial statements and proxy circulars from both banks, the analyst faces some challenges in performing a prospective analysis, a key input to any valuation model. The case highlights the cost-benefit analysis of disclosure that banks may perform when applying IFRS 8 – Operating Segments. The case also illustrates the challenges that segment disclosure poses to financial analysts and investors as they attempt to forecast a bank's earnings and to perform a valuation. Furthermore, the case develops the process by which a bank's business model is linked with its financial reporting and, ultimately, its valuation.</p>\n </div>","PeriodicalId":43435,"journal":{"name":"Accounting Perspectives","volume":"20 3","pages":"389-401"},"PeriodicalIF":1.6000,"publicationDate":"2021-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/1911-3838.12264","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Accounting Perspectives","FirstCategoryId":"1085","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/1911-3838.12264","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
An equity analyst at Q&M Independent Research Corporation is assessing the financial and business prospects of two Canadian banks: Bank of Montréal and Canadian Imperial Bank of Commerce. Relying on recent information provided in the financial statements and proxy circulars from both banks, the analyst faces some challenges in performing a prospective analysis, a key input to any valuation model. The case highlights the cost-benefit analysis of disclosure that banks may perform when applying IFRS 8 – Operating Segments. The case also illustrates the challenges that segment disclosure poses to financial analysts and investors as they attempt to forecast a bank's earnings and to perform a valuation. Furthermore, the case develops the process by which a bank's business model is linked with its financial reporting and, ultimately, its valuation.
Q&M独立研究公司(Q&M Independent Research Corporation)的一位股票分析师正在评估两家加拿大银行的财务和商业前景:蒙塔姆银行和加拿大帝国商业银行。根据两家银行的财务报表和代理通知中提供的最新信息，分析师在进行前瞻性分析时面临一些挑战，而前瞻性分析是任何估值模型的关键输入。该案例突出了银行在应用《国际财务报告准则第8号——经营分部》时可能进行的披露的成本效益分析。该案例还说明，在金融分析师和投资者试图预测一家银行的盈利并进行估值时，部门信息披露给他们带来了挑战。此外，该案例还揭示了银行的业务模式与其财务报告，并最终与其估值相关联的过程。
期刊介绍：
Accounting Perspectives provides a forum for peer-reviewed applied research, analysis, synthesis and commentary on issues of interest to academics, practitioners, financial analysts, financial executives, regulators, accounting policy makers and accounting students. Articles are sought from academics and practitioners that address relevant issues in any and all areas of accounting and related fields, including financial accounting and reporting, auditing and other assurance services, management accounting and performance measurement, information systems and related technologies, tax policy and practice, professional ethics, accounting education, and related topics. Without limiting the generality of the foregoing.
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