The impact of IFRS-8, segment reporting, on the disclosure practices of Polish listed companies

Abstract

Segment-reporting standards are an important element of financial reporting for public companies and require that a company’s segment disclosures be consistent with that of management’s internal reporting structure. While studies have examined the impact of International Financial Reporting Standard (IFRS)-8 in a number of different countries, none have focused on Poland. We focus on the benefits articulated in the International Accounting Standards Board (IASB)’s Basis-for-Conclusion and provide comprehensive evidence concerning the impact of IFRS-8 on the quality of segment information disclosed in the annual reports of 275 of the largest companies listed on the Warsaw Stock Exchange. We then extend our research by analyzing segment disclosure changes post-adoption for a subset of companies following clarifications issued by the IASB to IFRS-8 arising from the post-implementation review. Findings indicate that although the overall implementation of IFRS-8 resulted in several improvements in segment disclosures by Polish companies, disclosure rates are persistently low, particularly in the areas of reconciliations and geographic segments, indicating there are still areas that need further improvement. Our results have significant implications for both policy makers (i.e., IASB, US Financial Accounting Standards Board (FASB) and Polish standard setters) and other stakeholders interested in assessing the impact of the principle-based IFRS-8 standard and the measurement of segment information quality.