Predictive gains to segmental disclosure matrices, geographic information and industry sector comparability

Wenchao Kou and Simon Hussain

The British Accounting Review, 2007, vol. 39, issue 3, 183-195

Abstract: The aim of this study is to provide a detailed analysis of the multi-dimensional characteristics of segmental reporting, and their impact on improving investor-insight. We do this by examining the ability of segmental reporting characteristics among FTSE-100 firms to explain variation in the accuracy of analysts’ forecasts of earnings per share. We find that analyst-insight is significantly improved by the provision of data within a business-geographical matrix format, consistent with prior ‘laboratory’ evidence and UK analysts’ stated opinions in surveys. We also find that analyst-insight is improved where firms provide information regarding differences between their geographic markets and origins. In addition, analysts obtain improved insight from business segments that have a high degree of comparability to their respective industry sectors and where geographic segments are reported in a detailed manner.

Keywords: Segmental reporting; Geographic segments; Business segments; Matrix; Analysts’ forecasts (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:39:y:2007:i:3:p:183-195

DOI: 10.1016/j.bar.2007.05.002

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