Is Disaggregate Form of Information Value Relevant: Evidence from Indian Listed Companies

Abstract

Despite its scarcity, capital is necessary for a country’s economic development. To channelise capital foreign investment, financial intermediaries such as development banks, commercial banks, investment and financial institutions, insurance and investment banks are required. The expansion of the capital market is required to encourage and steer capital formation. The capital market encourages investment while also bringing vigour and dynamism to the country’s business organisations. The availability of accounting information and financial reporting is crucial for the effectiveness of capital markets, efficient resource allocation, capital information and economic development. Prior researchers prove the relevance of accounting information as a predictor of changes in stock behaviour in particular and growth of stock market in general. To augment this aspect the relevance of segment wise information provided by companies becomes important to be studied. Hence, the present study examines the influence of segment reporting on value relevance. Stock price after 90 days from the end of the financial year has been taken as a dependent variable and various segment related dimensions as independent variable for the period 2016–2017 to 2021–2022. It employed Ohlson (1995) model and indicates that Segment reporting information has significant and positive influence on value relevance thus it clearly indicates that investor’s view segment information while making investment decisions.

DOI: https://doi.org/10.21863/jcar/2024.13.3.001

Keywords: Value Relevance, Segment Reporting, Book Value Per Share, Earnings Per Share

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