Managers’ segment disclosure choices under IFRS 8: EU evidence

Aboud, Ahmed; Roberts, Clare

doi:10.1016/j.accfor.2018.09.004

Cited by 6 publications

(6 citation statements)

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“…Second, we investigate the moderating impact of enforcement level on the relationship between segment reporting quality and the cost of equity and debt capital after the adoption of IFRS 8. Prior literature fails to control for country‐level factors when testing this relationship (Aboud et al, 2018; André et al, 2016; Franzen & Weißenberger, 2018, Aboud & Roberts, 2018). Furthermore, Franzen and Weißenberger (2018), who examines a sample of German listed firms, call to examine IFRS 8 impact in other countries.…”

Section: Introductionmentioning

confidence: 99%

IFRS 8 and the cost of capital in Europe

2022

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This study examines segment reporting information usefulness after the adoption of IFRS 8 in 18 European Union countries. Specifically, 1) we introduce a new comprehensive measure of segment reporting quality that reflects four different dimensions of segment information, 2) we investigate the impact of segment reporting quality on the cost of equity and debt capital after the adoption of IFRS 8, and 3) we investigate the moderating role of the country-level enforcement system on the association between segment reporting quality and the cost of equity and debt capital after the adoption of IFRS 8. Using a selfconstructed segment reporting quality measure and a sample of 884 firm-year observations over the period of 2007 to 2011, we provide evidence that investors and lending institutions find no change in the usefulness of segment reporting after the adoption of IFRS 8. Our study is original in using a comprehensive measure of segment reporting quality. Furthermore, our study is the first to examine the relationship between segment reporting quality and the cost of debt capital after the adoption of IFRS 8 and the moderating role of the country-level enforcement system. Our findings provide useful insights to regulator and accounting standard-setting bodies about segment reporting.

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Section: Introductionmentioning

confidence: 99%

IFRS 8 and the cost of capital in Europe

2022

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“…The proprietary cost theory is widely recognised in the advancing of an understanding of segmental information reporting (Aboud and Roberts, 2018; Katselas and Rosov, 2018; Leung and Verriest, 2019). Competition and preparation costs are the two cornerstones that shape the behaviour of segmental information reporting.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

“…Similarly, Di Carlo and Lucchese (2016) found no significant changes that related to reporting under IAS‐14R or IFRS‐8 in the Italian context. By contrast, an increase in the extent of the reported items of segmental information reporting was notable (Kang and Gray, 2013; Aboud and Roberts, 2018). These variations may be influenced by companies’ capabilities in relation to segmental information reporting preparation, which are due to costly and disruptive changes in information systems (Burnett et al , 2010).…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

“…Such authorities have been exploited by the CODM, since recent evidence indicates that more power may be exercised over quality than over quantity (André et al , 2016). More specifically, the CODM provides a lower level of segmental information reporting for material that is adverse to competition (André et al , 2016; Aboud and Roberts, 2018). Whilst prior studies criticise IFRS 8’s failure to force companies with higher proprietary costs to increase segmental information reporting in relation to either quality and/or quantity (Aboud and Roberts, 2018), examining companies’ capabilities for information systems in shaping CODM choices has been overlooked, and this leads us to hypothesise that:

H3: The level of segmental reporting differs depending upon the identity of the CODM…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

“…The ERP value creation has been well documented in the context of management accounting (Rom and Rohde, 2007) and/or information systems (Grabski et al , 2011), and has focused on the quality of information (Booth et al , 2000), strategy (HassabElnaby et al , 2012), control (Quattrone and Hopper, 2005), decision‐making (Rom and Rohde, 2006), performance (Hunton et al , 2003) and reporting (Spathis and Ananiadis, 2005). By the same token, in relation to ERP, changes in segmental information reporting practices that are shaped by the quality dimension (items), quantity (segments) and reporting choice (reporters’ identity), either pre‐ and/or post‐ a managerial approach that is based on IFRS‐8 issuance, have all been given reasonable attention (André et al , 2016; Aboud and Roberts, 2018). Understanding the association of the ERP with segmental information reporting has, to date, been given scant attention.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Enterprise resource planning enabling segmental information reporting practices of UK‐FTSE 100

Ammar

Mardini

2020

Accounting & Finance

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The ERP impact on management accounting practices has been widely recognised as having a knowledge gap in relation to how it may facilitate Segmental Information Reporting following the International Financial Reporting Standard No. 8’s (IFRS‐8) management approach. This study contributes to filling this gap by investigating the joint effect of the ERP and IFRS‐8 Post‐Implementation Review (PIR) on dimensions: quality, quantity and the reporters’ identity of FTSE‐100 companies in the period 2013–2017. The study found that ERP is significantly and positively associated with the dimensions of segmental information reporting. The implications of this study extend research and the practices of segmental reporting on the importance of ERP in operationalising segmental reporting and in understanding variations.

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From IAS 14 to IFRS 8: the role of proprietary and agency costs in shaping financial reporting

Gisbert,

Navallas,

Romero

2024

Spanish Journal of Finance and Accounting / Revista Española de

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The relevance of segment reporting has prompted regulatory bodies to place significant efforts in refining the existent segment reporting regulation. The introduction of the IFRS 8 'management approach' in the segment reporting regulation was anticipated to facilitate a better understanding of the company's diverse businesses and regions, providing an opportunity to improve segment reporting disclosures. However, the effectiveness of segment reporting regulation is heavily influenced by the country regulatory environment and the characteristics of the firms. We exploit the Spanish institutional setting to provide further evidence on the real impact of IFRS 8 adoption. Our findings support the notion that the adoption of IFRS 8 has yielded few benefits to segment reporting. Importantly, our research reveals that segment disclosures have not exhibited heightened responsiveness to proprietary costs and have shown only a moderate response to agency costs after the adoption of IFRS 8.

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Managers’ segment disclosure choices under IFRS 8: EU evidence

Cited by 6 publications

References 93 publications

IFRS 8 and the cost of capital in Europe

IFRS 8 and the cost of capital in Europe

Enterprise resource planning enabling segmental information reporting practices of UK‐FTSE 100

From IAS 14 to IFRS 8: the role of proprietary and agency costs in shaping financial reporting

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