Segment Profitability and the Proprietary Costs of Disclosure

  title={Segment Profitability and the Proprietary Costs of Disclosure},
  author={Philip Berger and Rebecca N. Hann},
We exploit the new U.S. segment reporting standard, SFAS 131, to identify a sample of firms that increased segment disaggregation solely due to a mandated reporting change. We then test the joint hypothesis that: (1) the increase in segment reporting under the new rule indicates discretionary aggregation of segments under the old standard (SFAS 14) and (2) concerns about revealing profitability information motivated managers to aggregate segment data under the old reporting regime. We find… CONTINUE READING
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