Segment Profit/Loss and the Limitations of a “Management Approach”

The authors appreciate helpful comments from Kris Allee, Christine Botosan, Derek Christensen, Ted Christensen, Michael Ettredge, Danielle Fontaine, Shannon Garavaglia, Bret Johnson (AAA discussant), Peter Proestakes, Hal Schroeder, Andy Van Buskirk, Brian White, Jeff Wilks, and workshop participants at the AAA Annual Meeting, BYU Accounting Research Symposium, Ohio State University, University of Houston, University of Missouri, and University of Wisconsin-Madison. This paper was inspired by work conducted by two of the authors as Post-Doctoral Fellows at the Financial Accounting Standards Board (FASB). The survey and experiment in this study were approved by the Institutional Review Board at the University of Iowa.