Reporting disaggregated information: A critique based on Concepts Statement No. 2

In January 1996, the FASB, in cooperation with the Accounting Standards Board of the Canadian Institute of Chartered Accountants, issued an exposure draft, Reporting Disaggregated Information About a Business Enterprise, that dramatically changes the segment disclosures to be provided by US and Canadian companies. FASB is reconsidering segment reporting due primarily to the criticisms expressed by financial analysts, creditors, portfolio managers and other users as to the shortcomings found in SFAS 14, Financial Reporting for Segments of a Business Enterprise. A paper critiques the proposed standard on segment reporting. The critique is structured around Statement of Financial Accounting Concepts No. 2, Qualitative Characteristics of Accounting Information.