Research On Segment Information Disclosure And It’s Predictive Value Of Listing Companies

With the development of world economic integration tide, enterprises also showed atrend of diversification. Cross-industry, trans-regional business is increasingly highlighted.Because of cross-industry and trans-regional business profitability, the level of risk, thespeed of development, development opportunities, capital demand, future prospects,all ofthem are different. Traditional reports on the comprehensive development level of theconsolidated financial statements have been unable to meet the needs of users of financialinformation. However, from the date on which the segment information disclosed, there isthe preparation and disclosure of many other issues, making the reliability and usefulness ofsegment information by the user questioned. So, how does segment information disclosed inthe current situation? Dose Segment information has value relevance? Whether there is arelationship between the quality of Segment information disclosure and its predictive value?These problems enhance and improve the quality of our segment information disclosure ofsegment information disclosure standard theoretical and practical significance.In this paper, it is based on the segment information in the annual report of listingcompanies in Shanghai and Shenzhen stock market from year2007to2011as data samplesfor analysis. The status quo of the disclosure of segment information and its relativepredictive value are analyzed.Firstly, the number of businesses from the disclosure of segment information Segmentinformation disclosure form, the level of detail of the disclosure, the overall clarity andsegment reporting disclosure of these five areas were descriptive statistical analysis.Statistical results show that since the implementation of the "Accounting Standards forBusiness Enterprises No.35-Segment reporting of segment information disclosure qualityhas been improved to some extent reflected in: the disclosure of segment information isincreasing year by year; segment information disclosure form from only disclosed in thereport of the Board of Directors to be disclosed in the Directors’ Report and financialStatements; However, there are still many problems, such as: the use of segment reportingaccounting schedule to the number of listed companies to disclose segment informationsmall; inconsistencies in the level of detail of disclosure of segment information; duplicatedisclosure; significant changes in the Ministry of Finance on segment Reporting Standards-operating segments are reported segment information has not been effectively implemented,segment items disclosure completely and so on. These problems are mainly due to the Securities and Futures Commission and the Ministry of Finance between the differentstandards of segment information.Secondly, segment revenue/income information to the consolidated income/gainspredictive value difference by paired T-test method empirical analysis and test the predictivevalue of segment profit information disclosure quality. The study found that: based on thepredictive accuracy of the segment data is higher than that based on the predictive accuracyof the combined data; Segment Information Disclosure higher the quality, the predictivepower of the stronger.Finally, the conclusion of the study, the relevant policy recommendations to helpChina’s listing companies segment information disclosure norms.