Segment Reporting under IFRS 8

This study analyzes the impact of introducing IFRS 8 on segment reporting practice and its economic consequences. The results show that segment information based on the management approach is a useful decision, it mitigates information asymmetries, reduces the cost of capital and also affects the work of financial analysts.

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.

Autorentext

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).

Inhalt

Contents: Segment Reporting IFRS 8 Management Approach.