Are inter-segment revenues informative about future performance?

Xiaobo Dong, K.C. Lin and Yingxu Kuang

Advances in accounting, 2014, vol. 30, issue 2, 298-308

Abstract: This study investigates the degree to which a specific component of segmental disclosure, intersegment transactions, informs future segment-level and firm-level profitability. By using segment data reported under the FAS No. 131 regime, we find a positive association between intersegment revenues and one-year-ahead segment operating profits; this association is weakened by agency costs but not proprietary costs. We also find that the aggregate intersegment revenue reported by a firm is positively associated with future firm-level earnings. However, analysts seem to underreact to information in aggregate intersegment revenue.

Keywords: FAS 131; Inter-segment revenue; Analyst forecast error (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0882611014000327
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:30:y:2014:i:2:p:298-308

DOI: 10.1016/j.adiac.2014.09.002

Access Statistics for this article

Advances in accounting is currently edited by Dennis Caplan

More articles in Advances in accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().