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Disclosure of financial items in 10-Ks and stock price informativeness

Author

Listed:
  • Yu, Wayne W.
  • Cheng, C.S. Agnes
  • Hu, Yu
  • Johnston, Joseph A.
  • Tang, Feng

Abstract

In this paper, we introduce a novel measure of disclosure quality and investigate its impact on stock price informativeness. Our measure, termed Financial Items Completeness (FIC), is based on the number of financial items reported in a firm's annual report, as coded in Compustat. FIC is constructed using the ratio of all non-missing financial items reported in a firm's 10-K filing to those reported by industry peers, making it objective, scalable, and easily computable using the Compustat database. Analyzing a sample of 87,337 firm-year observations from 1986 through 2016, we find a robust relationship between FIC and stock price asynchronicity, indicating that more complete disclosure of financial items enhances stock price informativeness. Additionally, this relationship is more pronounced for firms with high information uncertainty and those with greater analyst coverage. Finally, we provide evidence that FIC improves stock price informativeness through transparency and corporate governance channels.

Suggested Citation

  • Yu, Wayne W. & Cheng, C.S. Agnes & Hu, Yu & Johnston, Joseph A. & Tang, Feng, 2026. "Disclosure of financial items in 10-Ks and stock price informativeness," Journal of Financial Stability, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finsta:v:84:y:2026:i:c:s1572308926000410
    DOI: 10.1016/j.jfs.2026.101539
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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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