The Effect of SFAS No. 131 on the Cross-Segment Variability of Profits Reported by Multiple Segment Firms
Issue Date
2006Author
Ettredge, Michael L.
Kwon, Soo Young
Smith, David B.
Stone, Mary S.
Publisher
Springer
Type
Article
Article Version
Scholarly/refereed, author accepted manuscript
Published Version
http://link.springer.com/article/10.1007%2Fs11142-006-6397-9#page-1Metadata
Show full item recordAbstract
Our study assesses whether SFAS No. 131 improved disclosure about the diversity of multiple
segment firms’ operations. We find a post-SFAS No. 131 increase in cross-segment variability
of segment profits, an increase in the association between reported and inherent cross-segment
variability, and an increase in association between reported variability and capital market
incentives to disclose. We interpret the results as evidence that SFAS No. 131 increased the
transparency of segment profitability disclosures, and as indicating SFAS No. 131 allowed
firms depending more on external financing to disclose more about differences in segment
profitability.
Description
This is the author's accepted manuscript. The publisher's official version is available electronically from: <http://link.springer.com/article/10.1007%2Fs11142-006-6397-9#page-1>.
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Citation
Ettredge, Michael. (2006) The Effect of SFAS No. 131 on the Cross-Segment Variability of Profits
Reported by Multiple Segment Firms. Review of Accounting Studies, 91-117.
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