Segment Reporting As One of the Areas of Convergence of Financial and Management Accounting

Auditor ◽  
2020 ◽  
Vol 6 (1) ◽  
pp. 41-46
Author(s):  
E. Voronova
Keyword(s):  
Management Accounting ◽  
Normative Documents ◽  
Segment Reporting ◽  
Economic Decisions ◽  
Segment Disclosures

Th e article is devoted to segment reporting as one of the areas of convergence of fi nancial and management accounting. It is noted that the consolidated fi nancial statements containing aggregated information are limited for making a number of economic decisions. Th e main normative documents regulating the disclosure and presentation of information by segments are considered. Attention is paid to the benefi ts and complexities associated with segment disclosures in fi nancial statements.

An Analysis of Segment Disclosures under SFAS No. 131 and SFAS No. 14

2000 ◽  
Vol 14 (3) ◽  
pp. 287-302 ◽  
Author(s):  
Don Herrmann ◽  
Wayne B. Thomas
Keyword(s):  
Decision Making ◽  
Geographic Area ◽  
Segment Reporting ◽  
Internal Organization ◽  
Country Level ◽  
Reporting Requirements ◽  
Geographic Segment Disclosures ◽  
Segment Disclosures ◽  
Number Of Firms ◽  
Segment Information

The purpose of this paper is to compare the segment reporting disclosures under SFAS No. 131 with those reported the previous year under SFAS No. 14. Under SFAS No. 131, firms are required to report segments consistent with the way in which management organizes the business internally. In addition, the accounting items disclosed for each segment are defined consistent with internal segment information used to assess segment performance. For many companies, this represents a significant change from the approach used to report segments under SFAS No. 14. Under SFAS No. 14, firms were required to disclose segment information by both line-of-business and geographic area with no specific link to the internal organization of the company or the measurements that were used for internal decision making. As a result, many complained that the resulting disclosures were highly aggregated and of limited use for decision-making purposes. We find that the change in segment reporting requirements under SFAS No. 131 has made a relatively significant impact on the disclosure of segment information. Over two-thirds of the sample firms have redefined their primary operating segments upon adopting SFAS No. 131. There has also been an increase in the number of firms providing segment disclosures and companies are disclosing more items for each operating segment. For enterprise-wide disclosures, the proportion of country-level geographic segment disclosures has increased, while the proportion of broader geographic area segment disclosures has decreased. However, the number of firms reporting earnings by geographic area has declined greatly as this item is no longer required to be disclosed for firms reporting on a basis other than geographic area.

scholarly journals Development of product costing in Lithuania (1918–2019)

2019 ◽  
pp. 2
Author(s):  
Daiva Tamulevičienė ◽  
Jonas Mackevičius
Keyword(s):  
Second World War ◽  
World War ◽  
Stages Of Development ◽  
Normative Documents ◽  
Economic Decisions ◽  
Product Costing ◽  
Soviet Occupation ◽  
The World ◽  
The Cost ◽  
Second World

Appropriate product costing helps not only to estimate the cost of production correctly but also to evaluate the activity results, forecast product prices, make reasonable economic decisions. The article analyses the development of product costing in Lithuania from 1918 to 2019. The following stages of development of product costing were distinguished: 1) between the world wars when Lithuania was independent and during the Second world war (1918–1944); 2) during the years of Soviet occupation (1944–1990); 3) after reinstating the independence of Lithuania (1990–2019). The most important provisions of normative documents related to product costing of every stage were analysed, opinions, statements and suggestions how to improve product costing by different Lithuanian authors were evaluated.

Segment Disclosures under SFAS No. 131: Has Business Segment Reporting Improved?

2000 ◽  
Vol 14 (3) ◽  
pp. 259-285 ◽  
Author(s):  
Donna L. Street ◽  
Nancy B. Nichols ◽  
Sidney J. Gray
Keyword(s):  
Annual Report ◽  
Business Enterprise ◽  
Segment Reporting ◽  
Additional Segment ◽  
Segment Disclosures ◽  
The Impact ◽  
Segment Information

In response to user concerns regarding segment reporting, the FASB issued SFAS No. 131, Reporting Disaggregated Information about a Business Enterprise, in 1997. SFAS No. 131 became effective for fiscal years beginning on or after January 1, 1998. This research examines the segment disclosures of U.S. Global 1000 companies for both 1997 and 1998 to ascertain the impact and effectiveness of SFAS No. 131 in practice. Specifically, this research considers whether the new requirements have resulted in (1) a greater number of line-of-business (LOB) segments for some enterprises, particularly those who claimed to operate in one LOB under SFAS No. 14, (2) enterprises reporting more items of information about each segment, and (3) improved consistency of segment information with other parts of the annual report. The research also addresses whether restructuring by some firms might limit the provision of additional segment information under SFAS No. 131. The findings indicate significant changes from reporting under SFAS No. 14 including increased consistency with information in the MD&A and other annual report disclosures. However, the practices of a significant minority of companies continue to give some cause for concern.

The State of Segment Reporting by US Public Entities: 1976-2017

2020 ◽  
Author(s):  
Christine A. Botosan ◽  
Adrienna Huffman ◽  
Mary Harris Stanford
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Data Driven ◽  
Financial Accounting Standards Board ◽  
Segment Reporting ◽  
Depth Data ◽  
Sfas 131 ◽  
The Stability ◽  
Segment Disclosures ◽  
Over Time

This paper offers an in-depth data driven overview of the history and status as of 2017 of segment reporting by public entities trading in U.S. capital markets. Our analysis focuses on the perceived issues identified in the Financial Accounting Standards Board (FASB) 2016 Invitation to Comment on FASB's Agenda - the extent of disaggregation into reportable segments, the stability of segmentation over time, the line-items disclosed, and the reconciliation of segment to consolidated totals. We document the trends in and status of segment reporting as of 2017 as another round of efforts to improve segment reporting proceeds. The paper concludes with a discussion of several unanswered questions suggested by the data. Keywords: Segment disclosures, SFAS 131, SFAS 14, ASC 280.

scholarly journals Los factores explicativos de la divulgación por segmentos en entidades no financieras cotizadas en los mercados europeos

2018 ◽  
Vol 63 (2) ◽  
pp. 36
Author(s):  
Pedro Amado ◽  
Fábio Albuquerque ◽  
Nuno Rodrigues
Keyword(s):  
Financial Reporting ◽  
Stock Index ◽  
The European Union ◽  
Barriers To Entry ◽  
Accurate Analysis ◽  
Segment Reporting ◽  
Financial Reporting Standards ◽  
Explanatory Factors ◽  
Segment Disclosure ◽  
Segment Disclosures

<p><span lang="EN-US">Segment reporting (external) is a relevant tool for investors and other stakeholders, as the information is presented in a divisional way, enabling more accurate analysis to be made for decision making. Howe­ver, reporting entities do not always assure the inherent potential of segment reporting. This research aims to identify the explanatory factors that may influence the level of segment disclosure. For this purpose, we have investigated the segment disclosures presented in accordance with the International Financial Reporting Standards (IFRS) 8 of the International Accounting Standards Board (IASB), as adopted by the European Union, based on consolidated reports and accounts (for the year 2015) of a sample of 91 entities from the Portuguese Stock Index (PSI-20), <em>Cotation Assistée en Continu </em>(CAC-40), <em>Deutscher Aktie­nindex </em>(DAX-30) and OMX Nordic 40 (OMX-N40). The findings indicate that size is directly related to both the number of operating segments disclosed and the level of disclosure required for each segment. Further, the latter seems to be also influenced by the existence of barriers to entry (directly) and the degree of internationalisation (inversely).</span></p>

scholarly journals Managers Segment Financial Reporting Choice: An Analysis Of Firms Segment Reconciliations

2012 ◽  
Vol 28 (6) ◽  
pp. 1413 ◽  
Author(s):  
Elio Alfonso ◽  
Dana Hollie ◽  
Shaokun Carol Yu
Keyword(s):  
Financial Reporting ◽  
Agency Costs ◽  
Policy Implications ◽  
Future Research ◽  
Firm Level ◽  
Earnings Volatility ◽  
Segment Reporting ◽  
Segment Disclosures ◽  
A Company ◽  
Number Of Segments

Under SFAS No. 131, a company is required to provide a reconciliation of the total of the reportable segments profit or loss to the firms consolidated income. This paper investigates these segment disclosures and related determinants of managers segment financial reporting choices. We focus on managers decisions to report segment-to-firm level reconciliations (i.e., segment reconciliations (SERs)) differences between firm-level and aggregated segment-level earnings. On average, we find that SERs are significant when the differences are not equal to zero. Firms with higher agency costs and greater accruals are less likely to report segment reconciliations. However, firms that have a greater number of segments, larger firms, and firms with higher leverage, losses, and greater earnings volatility are more likely to report SER?0. Consistent with managers having some segment reporting discretion, our overall findings suggest a managers segment reporting choice is partly driven by agency costs. Interestingly, among firms with reported segment reconciliations, firms with higher agency costs are more likely to report positive SERs. Consequently, this study documents a relation between proxies for agency costs and managers decisions to report segment reconciliations. Policy implications and suggestions for future research are discussed in the paper.

scholarly journals A PERSPECTIVE ON SEGMENT REPORTING CHOICES AND SEGMENT RECONCILIATIONS

2015 ◽  
Vol 1 (2) ◽  
pp. 88
Author(s):  
Dana Hollie
Keyword(s):  
Value Relevance ◽  
Level Of Detail ◽  
Segment Reporting ◽  
The Third ◽  
Common Area ◽  
History Of ◽  
Comment Letters ◽  
Segment Disclosures ◽  
Current Concerns ◽  
Market Consequences

In 2014, segment reporting gained third place in SEC comment letters. This article reviews the history of the segment reporting including the segment reporting choices and segment reconciliations, the current concerns as the level of detail in segment disclosures varies widely across organizations, the value relevance of segment reconciliations and its market consequences, and the importance of segment reporting to management. The following are highlights of the manuscript: The third-most-common area discussed in SEC comment letters: segment reporting.The application of SFAS131: the whole may not equal the sum of its parts. The level of detail in segment disclosures varies widely across organizations.Segment reconciliation adds value to consolidated earnings.Segment reconciliation can have significant market consequences.Additional guidance on segment reporting may be beneficial and necessary in the future.

scholarly journals The relevance of segments reports – measurement methodology

2017 ◽  
pp. 0-0
Author(s):  
Tomasz Zimnicki
Keyword(s):  
Stock Exchange ◽  
Financial Statements ◽  
Reporting Standards ◽  
Segment Reporting ◽  
Warsaw Stock Exchange ◽  
Measurement Methodology ◽  
Feature Relevance ◽  
Segment Disclosures ◽  
A Company ◽  
Activity Areas

The segment report is one of the areas of financial statements, and it obliges a company to provide infor-mation about the economic situation in each of its activity areas. The article evaluates the change of segment reporting standards from IAS14R to IFRS8 in the context of feature relevance. It presents the construction of a measure which allows the relevance of segment disclosures to be determined. The created measure was used to study periodical reports published by companies listed on the main market of the Warsaw Stock Exchange from three reporting periods – 2008, 2009 and 2013. Based on the re-search results, it was found that the change of segment reporting standards from IAS14R to IFRS8 in the context of relevance was legitimate.

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