Has Business Segment Disclosures under SFAS No. 131 Improved in the Last Ten Years? (2013-2004)

Abstract

The purpose of the paper is to determine if business segment disclosures under SFAS No. 131 has improved in the last ten years. The paper analyzes ten years (2013-2004) of segment disclosures of 200 of the Fortune 500 listed companies reporting under SFAS No. 131. For each of these ten years, the analysis specifically includes the number of segments reported; the number of companies which changed the name of one or more of their segments; the number of actual line-items reported for each segment; the general category of line-items reported for each segment; the number of geographic areas reported; the names of geographic areas reported; and the names of countries reported. The paper finds that segment disclosure practices have remained virtually unchanged over this ten year period—thus calling into question whether SFAS No. 131 is truly achieving its purposes, as the Financial Accounting Foundation (FAF) stated it is in its January of 2013 post-implementation review (PIR) of SFAS No. 131.