Abstract This article examines the informativeness of disaggregated data in financial statements by comparing the informativeness of conventional disaggregation with that of the industry and geographical disaggregations in segment disclosure. The usefulness of disaggregated data depends on both internal factors that relate to the accounting processes and external factors, that relate to uses to which users apply accounting data. This article focuses on a quantitative dimension of the former, proposing the use of the "disaggregation measure" as a measure of the informativeness of disaggregated data. The article focuses on a qualitative dimension of the latter, examining the need to distinguish the information requirements of those who manage capital from those who manage resources. Capital is homogeneous while resources are not. Hence, the conventional disaggregation, which is much more resource-oriented than the two newer disaggregations, loses its significance quickly as data are aggregated across diverse industries or countries. The industry and geographical disaggregations, on the other hand, are capital-oriented and are rapidly gaining in significance as business diversifies and becomes global. Finally, the article explores an accounting policy issue dealing with the possibility of developing a "segment statement" as a fourth primary financial statement, one that would cut across the balance sheet, the income statement, and the cash flow statement.
Yuji Ijiri (Fri,) studied this question.