دانلود رایگان مقاله بررسی درآمد بین بخش ها و اطلاعات مفید در مورد عملکرد آینده

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.

7. Concluding remarks

This study investigated the degree to which a specific component of segmental disclosure, intersegment transactions, informs future segment-level and firm-level profitability in the context of the implementation of FAS 131. At the segment level, we found a positive association between intersegment revenues and one-year-ahead segment operating profits. When examining how proprietary costs and agency costs affect the degree to which intersegment revenues inform future segment-level earnings, we used a segment's abnormal profit relative to industry peers and found that the informativeness of intersegment revenues decreases agency costs, whereas proprietary costs show no effect in this regard. We also found that the aggregate intersegment revenue reported by a firm is positively associated with future firm-level earnings, suggesting that intensive intersegment transactions are indicative of future value creation. When examining whether financial analysts' earnings forecasts incorporate information on current aggregate intersegment revenue, we showed that analyst forecast error is negatively correlated with aggregate intersegment revenue, suggesting that analysts generally underreact to such revenue. Overall, our results provide support for FAS 131 in that the mandated disclosure of intersegment transactions may benefit financial statement users when assessing the financial prospects of a segment or firm. Our results also indicate that when using intersegment revenues to assess a segment's future performance, financial statement users should consider the effect of proprietary costs.