The Effects of SFAS 131 Geographic Segment Disclosures by U.S. Multinational Companies on the Valuation of Foreign Earnings

2007 ◽  
Author(s):  
Ole-Kristian Hope ◽  
Tony Kang ◽  
Wayne B. Thomas ◽  
Florin P. Vasvari
Keyword(s):  
Multinational Companies ◽  
Foreign Earnings ◽  
Sfas 131 ◽  
Geographic Segment Disclosures ◽  
Segment Disclosures

International Diversification, SFAS 131, and Debt Maturity Structure

2018 ◽  
Vol 35 (2) ◽  
pp. 438-468 ◽  
Author(s):  
Changjiang Wang
Keyword(s):  
International Diversification ◽  
Debt Maturity ◽  
Financial Accounting ◽  
Debt Maturity Structure ◽  
Sfas 131 ◽  
Maturity Structure ◽  
Geographic Segment Disclosures ◽  
Segment Disclosures ◽  
Diversified Firms ◽  
The Impact

This study examines the impact of geographic segment disclosures under the Statement of Financial Accounting Standards No. 131 (SFAS 131) on the debt maturity structure of internationally diversified firms. I find that the proportion of short-maturity debt increases with a firm’s international diversification. Moreover, the implementation of SFAS 131 attenuates the positive relation between international diversification and short-maturity debt. This attenuation effect is more pronounced for firms that continue to disclose geographic segment earnings in the post-SFAS 131 period than firms that do not. As short-maturity debt subjects firms to refinancing and potential costly liquidation risks, these results suggest a beneficial role of SFAS 131 in reducing firms’ reliance on short-maturity debt to address information asymmetry and agency costs of debt arising from international diversification. Furthermore, this study suggests that enhanced mandatory disclosure has a real effect on firms’ financing activities and capital structure.

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.

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.

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