Has Segment Reporting Disclosure under GAAP and IFRS Improved?

• In Event: Breakfast with Research Round Table Forum
  In Workshop: Table 1

Abstract

Focus/Research Question: The Financial Accounting Foundation (FAF) and the International Accounting Standards Board (IASB) recently completed post-implementation reviews (PIRs) for their converged standards on operating segments SFAS 131 and IFRS 8. The two accounting bodies largely concluded that IFRS 8 and SFAS 131 are achieving their stated purposes. This paper examines whether segment reporting disclosures by firms reporting under GAAP and IFRS has remained virtually unchanged the last ten years, despite the PIRs by the FAF and IASB.

Research to date/preliminary insights: Research and analysis has been conducted to date on segment reporting disclosure under GAAP by reviewing the Form 10-Ks filed with the SEC for each of the previous ten years (2004-2013) for163 of the largest firms as provided in the 2013 Fortune 500 listing, with the objective of reaching 200-250 firms. Certain firms have not changed the number of segments the report, or the information disclosed for their segments in the last ten years.

Research and analysis of segment reporting under IFRS is beginning by compiling the annual reports of firms reporting under IFRS. These annual reports are being obtained by researching non-U.S. firms reporting under IFRS and filing on Form 20-F with the SEC, as well as through the websites of the largest firms listed on the London Stock Exchange as provided in the FTSE 100 Index and FTSE 250 Index.

Theoretical/Academic Implications: This paper informs the academic community on how segment reporting disclosure has varied over the last ten years between GAAP and IFRS and challenges whether the FAF and IASB findings in their PIRs is accurate.

Practitioner/Policy Implications: This paper informs practitioners of the historical trends of segment reporting disclosures under GAAP and IFRS and challenges whether GAAP and IFRS policy in SFAS 131 and IFRS 8 are truly accomplishing their stated purposes.

Author

• Robert Bell, Saint John's University - MN