Level of Segment Information Disclosure in Annual Financial Reports and Its Affecting Factors: An Applied Study on Jordanian Public Shareholding Companies

Inaam M. Al-Zwaylif, Amer A. Hajjaj

Abstract


The objective of this study is to investigate the level of disclosure of segment information in annual financial reports of Jordanian public shareholding companies. It also aims to examine the impact of some factors pertaining to selected company characteristics; namely, type of sector, age of listing in the financial market, rate of growth, financial leverage and volatility of earnings at the level of segment information disclosure in these reports. To this end, a disclosure index was developed according to the International Financial Reporting Standard 8 (IFRS 8) disclosure requirements. Content analysis was used to identify the items that were disclosed in these reports. The study population included all Jordanian public shareholding companies listed in Amman Stock Exchange, amounting to 247 companies. A sample of 105 companies was selected in three sectors: industrial sector (30 companies), service sector (25 companies) and financial sector (50 companies). The study concluded that the overall level of segment information disclosure in the annual financial reports of Jordanian public shareholding companies was very poor.The results also showed that the characteristics of the company, as a whole, have a significant impact on the level of segment information disclosure in these reports. In addition, the results revealed that each of the following characteristics (separately) significantly affects the level of segment information disclosure: type of sector, age of listing and rate of growth. However, there was no significant effect of financial leverage and volatility of earnings (individually) on this level. The study concluded with a number of recommendations, most notably: the Jordanian Securities Commission should enforce public shareholding companies to disclose all segment information required according to the IFRS 8 disclosure requirements. The managements of public shareholding companies should also give segment information disclosure more attention and work hard to increase the level of this disclosure in annual financial reports

Keywords


Disclosure, Segment information, IFRS 8, Company characteristics, Financial reports

Full Text:

PDF

Refbacks

  • There are currently no refbacks.