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Volume 3
Issue 3
Online publication date 2010-10-14
Title The information content of SFAS No 131 interim segment reporting
Author Joong-Seok Cho
Abstract This study empirically investigates the effect of implementation of SFAS No.131 on companies' information environments by assessing the effect of interim period financial reports. Especially, using Beaver's information content measures, it investigates the market's reaction to interim period financial reporting under SFAS No.131. The empirical results of the information content test show that the adoption of SFAS No.131 does not affect the market's reaction. For the volume reaction test, no difference was found in the reaction to the interim financial statement filing for both voluntary and nonvoluntary disclosers. This result gives evidence that the information content of the new requirements of interim financial reporting is not significantly different from that under the previous requirements
American Institute of Certified Public Accountants (AICPA), 1994. “Improving business reporting - A customer Focus, Report on the AICPA Special Committee on Financial Reporting (“Jenkins Committee”),” New York, NY:AICPA

Association for Investment Management and Research (AIMR), 1993. “Financial reporting in the 1990s and beyond: A position paper of the Association for Investment Management and Research,”  Prepared by Peter H. Knutson. Charlottesville, VA: AIMR
Atiase, R., Bamber, L., 1994. “Trading volume reactions to annual accounting earnings Announcements,” Journal of Accounting and Economics, 17, pp.309-29

Beaver, W., 1968. “The information content of annual earnings announcement,” Journal  of  Accounting Research, 6, pp.67-92

Berger, P., Hann, R., 2003. “The impact of SFAS No.131 on information and Monitoring,” Journal of Accounting Research Vol. 41, No2, pp.163-223

Botosan, C., Harris, M., 2000. “Motivations for a change in disclosure frequency and its consequences: An examination of voluntary quarterly segment disclosures,” Journal of Accounting Research, 40, pp.21-40

Botosan, C., Harris, M., 2005. “Managers’ motives to withhold segment disclosures and the effect of SFAS No.131 on Analysts’ Information Environment,” The Accounting Review Vol. 80, No3, pp. 751-71

Ettredge, M., Kwon, S., Smith, D., Zarowin, P., 2005. “The impact of SFAS No. 131, Business segment data on the market’s ability to anticipate future earnings,” The Accounting Review Vol. 80, No3, pp.773-804   

Financial Accounting Standards Board (FASB), 1997. “Disclosures about segments of an enterprise and related information. Statement of Financial Accounting Standards No. 131,” Stamford, CT: FASB

Landsman, W., and Maydew, M., 2001. “Beaver (1968) revisited: Has the information content of quarterly earnings announcements declined in the past three decades?” University of North Carolina, Chapel Hill, NC. Unpublished working  paper 

Pattel, J., 1976. “Corporate forecasts of earnings per share and stock prices behavior : Empirical tests,” Journal of Accounting Research, 14, pp.246-76

Keywords Accounting standards, SFAS No.131, information contents, economic affects, U.S.A
Pages 73-82
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