Vakil, Tara Leanne (2019-05). Can Disaggregation in the Financial Statements Enhance the Credibility and Quality of Non-Gaap Disclosures?. Doctoral Dissertation. Thesis uri icon


  • Given the recent interest of standard-setters in financial statement disaggregation, I investigate the open question of whether disaggregated information has confirmatory value or results in information overload. Specifically, I utilize the non-GAAP setting to investigate whether disaggregated information enhances the credibility of management's voluntary disclosures. I find that reporting non-GAAP earnings is associated with greater disaggregation in the firm's financial statements, whereas aggressive non-GAAP reporters are less likely to disaggregate financial information. This suggests that managers recognize the confirmatory value of more precise and verifiable information in the annual report and increase disaggregation to enhance the credibility of private information disclosures, such as non-GAAP earnings. Additionally, I find evidence that disaggregation increases the quality of non-GAAP reporting, which further highlights that firms which provide more transparent financial reporting are more consistent in the presentation of non-GAAP earnings.

publication date

  • May 2019
  • August 2019