The Information Content of Discretionary Disaggregation
I examine the information content embedded in firms' decision to disaggregate financial statement line items. I find that the level of disaggregation predicts both current and future performance. I also find that significant changes in discretionary disaggregation are indicative of weak fundame...
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| Format: | Thesis |
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Massachusetts Institute of Technology
2022
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| Online Access: | https://hdl.handle.net/1721.1/143260 |
| _version_ | 1826215302939017216 |
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| author | Anderson, Samuel S. |
| author2 | So, Eric C. |
| author_facet | So, Eric C. Anderson, Samuel S. |
| author_sort | Anderson, Samuel S. |
| collection | MIT |
| description | I examine the information content embedded in firms' decision to disaggregate financial statement line items. I find that the level of disaggregation predicts both current and future performance. I also find that significant changes in discretionary disaggregation are indicative of weak fundamentals. In particular, I document a hump-shaped pattern such that both increases and decreases in discretionary disaggregation are negatively associated with measures of performance. Investors do not unravel this information at the time of filing, resulting in predictable return patterns over time. Together, these findings are consistent with discretionary disaggregation providing an informative-but low saliency-signal regarding firms' fundamental performance. |
| first_indexed | 2024-09-23T16:23:55Z |
| format | Thesis |
| id | mit-1721.1/143260 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T16:23:55Z |
| publishDate | 2022 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/1432602022-06-16T03:03:22Z The Information Content of Discretionary Disaggregation Anderson, Samuel S. So, Eric C. Sloan School of Management I examine the information content embedded in firms' decision to disaggregate financial statement line items. I find that the level of disaggregation predicts both current and future performance. I also find that significant changes in discretionary disaggregation are indicative of weak fundamentals. In particular, I document a hump-shaped pattern such that both increases and decreases in discretionary disaggregation are negatively associated with measures of performance. Investors do not unravel this information at the time of filing, resulting in predictable return patterns over time. Together, these findings are consistent with discretionary disaggregation providing an informative-but low saliency-signal regarding firms' fundamental performance. S.M. 2022-06-15T13:07:56Z 2022-06-15T13:07:56Z 2022-02 2022-01-04T21:11:55.364Z Thesis https://hdl.handle.net/1721.1/143260 In Copyright - Educational Use Permitted Copyright MIT http://rightsstatements.org/page/InC-EDU/1.0/ application/pdf Massachusetts Institute of Technology |
| spellingShingle | Anderson, Samuel S. The Information Content of Discretionary Disaggregation |
| title | The Information Content of Discretionary Disaggregation |
| title_full | The Information Content of Discretionary Disaggregation |
| title_fullStr | The Information Content of Discretionary Disaggregation |
| title_full_unstemmed | The Information Content of Discretionary Disaggregation |
| title_short | The Information Content of Discretionary Disaggregation |
| title_sort | information content of discretionary disaggregation |
| url | https://hdl.handle.net/1721.1/143260 |
| work_keys_str_mv | AT andersonsamuels theinformationcontentofdiscretionarydisaggregation AT andersonsamuels informationcontentofdiscretionarydisaggregation |