Abstract
Statement of Financial Accounting Standards (SFAS) No. 14 requires U.S. firms with significant foreign operations to disaggregate certain disclosures into geographic segments. To date, however, there have been few studies that investigate the usefulness of this information to financial statement users. This study investigates whether or not financial analysts' earnings forecasts for multinational firms improved after SFAS 14. The results indicate that after adjustment for differences in earnings variability, financial analysts' forecasts of the earnings of multinational firms did become significantly more accurate (relative to that of a group of control firms) after the disclosure of geographic segment information.
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