Are Recent Segment Disclosures of Indian Firms Useful? - An Exploratory Study

Abstract

The major objective of financial statements is to provide information, which is useful to the present and prospective investors, creditors and other user group (Exhibit-1) to make rational investment, credit and other pertinent economic decision-making (Ashok Chandak, 2003). With the globalisation and liberalization of economy, firms have diversified their operations in different products, services as well as in different geographical areas. Rates of profitability, opportunities for growth and risks vary significantly from one industrial sector to another and from one geographical area to another (Iyer, N.V, 2003). Thus, firms which are diversified and multi locational need to provide information about different type of products, services and its operation in different geographical areas and the relative important of each in order to understand the enterprise, the economic environment in which it operates and the development of the situation of the firm. In this paper, we made an attempt to document some of the first hand evidences from the users perspective especially from the analysts about the usefulness of the segment reporting.