Information content of mandatory quarterly foreign sales data of U.S. multinational companies under SFAS 131

Mahmud Hossain, Barry R. Marks

Research output: Contribution to journalJournal articlepeer-review

6 Scopus citations

Abstract

This paper investigates the information content of mandatorily disclosed quarterly foreign sales data of U.S. multinational companies under SFAS No. 131. We examine two types of companies. Predisclosing companies had voluntarily disclosed quarterly foreign sales data prior to implementation of SFAS No. 131. Non-predisclosing companies had not voluntarily disclosed quarterly foreign sales data prior to implementation of SFAS No. 131. We analyze the behavior of stock prices surrounding the filing date of the 10Q using short-window event study methodology and the market model for the initial years after enacting SFAS No. 131. We discover that the quarterly foreign sales data has information content to investors for both predisclosing firms and non-predisclosing firms except for 1 year. The data has no information content for non-predisclosing companies during the first year of implementation of SFAS No. 131. Except for the first year of implementation of SFAS No. 131, we find no difference in the information content of this data between predisclosing and non-predisclosing companies.

Original languageEnglish
Pages (from-to)105-120
Number of pages16
JournalJournal of International Accounting, Auditing and Taxation
Volume14
Issue number2
DOIs
StatePublished - 2005
Externally publishedYes

Keywords

  • Geographic segment disclosure
  • Multinational companies
  • Quarterly disclosure
  • SFAS No. 131

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