Economics at your fingertips  

The usefulness of Non-IFRS segment data

Max Göttsche, Stephan Küster and Tobias Steindl

Journal of International Accounting, Auditing and Taxation, 2021, vol. 43, issue C

Abstract: A controversial aspect of International Financial Reporting Standard (IFRS) 8 allows firms to define their segment profit (or loss) on a different basis than IFRS measurement and recognition principles, but whether these non-IFRS segment data are useful is in large part unexplored. We fill this gap by investigating the usefulness of non-IFRS segment data from the perspective of financial analysts. Using hand-collected segment data on a sample of European multi-segment firms, we find empirical evidence that non-IFRS segment data lead to less accurate analyst forecasts. Additionally, we find that non-IFRS segment data are associated with higher forecast dispersion, higher uncertainty in analysts’ forecasts, and a lower precision of analysts’ public information set. Collectively, our findings suggest that non-IFRS segment data impair analysts’ information environment, which casts doubt on their usefulness.

Keywords: IFRS 8; Management approach; Segment reporting; Non-IFRS segment data; Analysts; Forecast accuracy (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
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:

DOI: 10.1016/j.intaccaudtax.2021.100382

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-02-08
Handle: RePEc:eee:jiaata:v:43:y:2021:i:c:s1061951821000070