Segment Reporting under IFRS 8

Reporting practice and economic consequences

by Martin Nienhaus (Author)
©2015 Thesis XXIII, 248 Pages


The adoption of IFRS 8 marked a major change in the segment reporting rules under IFRS. This step, however, was heavily criticized and several questions regarding IFRS 8 still remain unanswered. Therefore, this study analyzes the impact of IFRS 8 on segment reporting practice and its economic consequences. The results show that firms report on average more segment information. Moreover, segment reports from the management’s perspective are useful and mitigate information asymmetries, reduce the cost of capital and affect the work of financial analysts. The findings have implications for the IASB, preparers, auditors and users of financial statements as well as enforcement institutions.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the Author
  • About the Book
  • This eBooks can be cited
  • Contents
  • List of figures
  • List of tables
  • List of abbreviations
  • List of symbols
  • 1. Introduction
  • 1.1. Research questions and objectives
  • 1.2. Outline of the study
  • 1.3. Scientific positioning
  • 2. Conceptual basis
  • 2.1. Segment reporting in financial accounting
  • 2.1.1. Objectives and users of segment reporting
  • 2.1.2. Benefits and costs of segment reporting
  • 2.1.3. Fundamental concepts and characteristics of segment reporting
  • Fundamental concepts
  • Management approach
  • Risk-and-reward approach
  • Definition of segments
  • Measurement
  • Disclosures
  • 2.2. Segment reporting requirements
  • 2.2.1. Historical development
  • 2.2.2. Core principle and scope
  • IFRS 8
  • IAS 14R
  • 2.2.3. Definition of segments
  • IFRS 8
  • IAS 14R
  • 2.2.4. Measurement
  • IFRS 8
  • IAS 14R
  • 2.2.5. Disclosures
  • IFRS 8
  • IAS 14R
  • 2.2.6. Remaining differences to SFAS No.
  • 2.2.7. Summary
  • 3. State of research
  • 3.1. Descriptive studies
  • 3.1.1. Studies on the introduction of SFAS No. 131
  • 3.1.2. Studies on the introduction of IFRS 8
  • 3.2. Economic consequences studies
  • 3.2.1. Studies on the impact of SFAS No. 131
  • 3.2.2. Studies on the impact of IFRS 8
  • 3.3. Summary and research gap
  • 4. Theory and hypotheses development
  • 4.1. Theoretical foundation
  • 4.1.1. Fundamental theories
  • Principal agent theory
  • Efficient market hypothesis
  • 4.1.2. Theoretical assessment of the impact of the management approach on the quality of segment disclosures
  • Relevance
  • Faithful representation
  • Enhancing qualitative characteristics
  • 4.1.3. Theoretical framework of the capital market perspectives
  • Disclosure and information asymmetries
  • Disclosure and cost of capital
  • Disclosure and financial analysts’ information environment
  • 4.1.4. Summary
  • 4.2. Hypotheses development
  • 4.2.1. Changes in segment reporting practices
  • 4.2.2. Economic consequences
  • 5. Analysis of segment reporting practice
  • 5.1. Methodological approach
  • 5.1.1. Content analysis
  • Development of the catalogue
  • Data collection process
  • 5.1.2. Sample selection and distribution
  • 5.2. Results
  • 5.2.1. General information
  • 5.2.2. Segmentation
  • 5.2.3. Measurement
  • 5.2.4. Disclosures
  • 5.2.5. Reconciliation
  • 5.3. Discussion
  • 6. Analysis of economic consequences
  • 6.1. Methodological approach
  • 6.1.1. Preliminary considerations
  • 6.1.2. Research design
  • 6.1.3. Variables for the regression analyses
  • Information asymmetry
  • Cost of capital
  • Financial analysts’ information environment
  • 6.1.4. Classification of the treatment and the control group
  • 6.1.5. Sample selection adjustments
  • 6.2. Information asymmetry
  • 6.2.1. Univariate and bivariate analyses
  • 6.2.2. Regression analysis
  • 6.2.3. Further robustness tests
  • 6.3. Cost of capital
  • 6.3.1. Univariate and bivariate analyses
  • 6.3.2. Regression analysis
  • 6.3.3. Further robustness tests
  • 6.4. Financial analysts’ information environment
  • 6.4.1. Univariate analysis and bivariate analysis
  • 6.4.2. Further robustness tests
  • 6.5. Discussion
  • 7. Conclusions
  • 7.1. Main findings and implications
  • 7.2. Limitations and outlook
  • Appendix
  • Bibliography
  • Series Index


List of figures

List of tables

List of abbreviations

List of symbols


1.1Research questions and objectives

1.2Outline of the study

1.3Scientific positioning

2Conceptual basis

2.1Segment reporting in financial accounting

2.1.1Objectives and users of segment reporting

2.1.2Benefits and costs of segment reporting

2.1.3Fundamental concepts and characteristics of segment reporting concepts approach approach of segments

2.2Segment reporting requirements

2.2.1Historical development

2.2.2Core principle and scope 8 14R

2.2.3Definition of segments 8 14R

2.2.4Measurement 8 14R ← XI | XII →

2.2.5Disclosures 8 14R

2.2.6Remaining differences to SFAS No.


3State of research

3.1Descriptive studies

3.1.1Studies on the introduction of SFAS No. 131

3.1.2Studies on the introduction of IFRS 8

3.2Economic consequences studies

3.2.1Studies on the impact of SFAS No. 131

3.2.2Studies on the impact of IFRS 8

3.3Summary and research gap

4Theory and hypotheses development

4.1Theoretical foundation

4.1.1Fundamental theories agent theory market hypothesis

4.1.2Theoretical assessment of the impact of the management approach on the quality of segment disclosures representation qualitative characteristics

4.1.3Theoretical framework of the capital market perspectives and information asymmetries and cost of capital and financial analysts’ information environment


4.2Hypotheses development

4.2.1Changes in segment reporting practices

4.2.2Economic consequences ← XII | XIII →

5Analysis of segment reporting practice

5.1Methodological approach

5.1.1Content analysis of the catalogue collection process

5.1.2Sample selection and distribution


5.2.1General information






6Analysis of economic consequences

6.1Methodological approach

6.1.1Preliminary considerations

6.1.2Research design

6.1.3Variables for the regression analyses asymmetry of capital analysts’ information environment

6.1.4Classification of the treatment and the control group

6.1.5Sample selection adjustments

6.2Information asymmetry

6.2.1Univariate and bivariate analyses

6.2.2Regression analysis

6.2.3Further robustness tests

6.3Cost of capital

6.3.1Univariate and bivariate analyses

6.3.2Regression analysis

6.3.3Further robustness tests

6.4Financial analysts’ information environment ← XIII | XIV →

6.4.1Univariate analysis and bivariate analysis

6.4.2Further robustness tests



7.1Main findings and implications

7.2Limitations and outlook


Bibliography ← XIV | XV →

List of figures

Figure 1-1:Research fields of the study

Figure 1-2:Outline of the study

Figure 2-1:Cost of capital components and informativeness of disclosures

Figure 2-2:Expected benefits and disadvantages based on the comment letters

Figure 2-3:Timeline for the post-implementation review of IFRS 8

Figure 2-4:Diagram for identifying reportable segments

Figure 3-1:Classification of the related empirical literature

Figure 4-1:Summary of the theoretical framework

Figure 5-1:Content analysis catalogue

Figure 5-2:General empirical timeline

Figure 5-3:Industry distribution

Figure 5-4:Results for proposition one

Figure 5-5:Results for proposition two

Figure 5-6:Results for proposition three

Figure 5-7:Results for proposition four

Figure 5-8:Results for proposition five

Figure 6-1:Difference-in-differences design


XXIII, 248
ISBN (Hardcover)
Publication date
2015 (July)
Management Approach reporting practice information through the management's eyes
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2015. XXIV, 248 pp., 83 tables, 19 graphs

Biographical notes

Martin Nienhaus (Author)

Martin Nienhaus studied Business Administration and Economics at the University of Münster (Germany) and at Monash University in Melbourne (Australia). He worked as a research assistant for the Chair of International Accounting at the University of Münster and at the Pennsylvania State University (USA).


Title: Segment Reporting under IFRS 8
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