Compustat Segments: business- and geographic-segment financials (licensed)

Licensed: not exercised here

Compustat Segment data is a paid S&P product, so it carries no provenance badge: the access path below was not run in this session (no WRDS / Compustat credentials were available). It is commonly reached through WRDS. The page documents the access route and the gotchas; treat it as unverified until someone exercises it through a licensed account. This is the honest grade under the institute’s Verified discipline.

Compustat Segment data reports financials below the consolidated firm level, broken out by line of business (operating / business segments) and by geography, as disclosed under segment-reporting accounting standards (US: SFAS 131; earlier SFAS 14). Fields include segment sales, operating profit, identifiable assets, capital expenditure, depreciation, and the segment’s industry classification (SIC / NAICS). It is used to study diversification, internal capital markets, and within-firm exposure. A paper we distill uses it: Grigoris et al. on investment and upstream / downstream uncertainty, where segment links map vertical exposure across the supply chain.

• Cost: licensed, subscription. No free tier.
• Vendor: S&P Global Market Intelligence / Compustat.
• Coverage: US / North American filers that report segments; segment history from the late 1970s for the legacy standard and from 1998 for SFAS 131; annual.

Access (when licensed)

• Via WRDS. Compustat Segment files are reached through WRDS under the Compustat segment data set. The main tables are the segment annual files (for example wrds_segmerged / seg_annual), keyed by gvkey.
• Filter by segment type. Segment type codes (stype) distinguish business / operating segments from geographic segments and from pension / other segment types; always select the type you intend before aggregating.
• Credentials are required. Keep any WRDS credentials in .env, never hard-coded.

Gotchas (the ones that bite pipelines)

These are the failure modes to expect; they are documented, not verified here.

• The SFAS 14 to SFAS 131 break is not comparable. In 1997 / 1998 the reporting standard changed from industry segments (SFAS 14) to the “management approach” (SFAS 131), which redefined what counts as a reportable segment. Segment counts and definitions are not comparable across that break; do not pool a panel straight through it without accounting for the change.
• Segment type codes matter; do not double-count. Business / operating, geographic, and operating segment types overlap. Segment sales summed across all types can exceed firm sales. Filter by stype to one type before summing, or you will double-count.
• Segments are not a stable panel unit. Firms self-define their segments and re-define them from year to year, so a segment is not a fixed entity over time and segment identifiers are not persistent. Do not assume a segment in year t is the same unit in year t+1.
• Segment items do not reconcile to the consolidated total. The sum of segment-level items does not equal the firm-level total because of eliminations, “other / corporate” segments, and unallocated items. Expect a residual; do not treat the segment sum as the firm number.
• Industry codes attached to segments are coarse and move. The SIC / NAICS code on a segment is at a high level and can change across years, so an industry-based segment classification is approximate.
• Coverage is conditional on disclosure. Small or single-segment firms report a single segment, and non-disclosure is not missing-at-random. A segment sample is selected toward larger, more diversified firms.
• Linking needs gvkey plus care. Joining segments over time, or to firm-level Compustat, uses gvkey plus careful handling of the segment IDs; do not rely on segment identifiers alone to track a segment across years.

Reference: segment type codes and main fields

Segment type (stype)	What it holds
Business / operating	Line-of-business segments (the SFAS 131 reportable segments)
Geographic	Sales and assets broken out by region or country
Pension / other	Pension and residual segment types reported alongside the above

Field	What it holds
gvkey	Firm identifier (links to firm-level Compustat)
Segment sales	Revenue attributed to the segment
Operating profit	Segment operating income
Identifiable assets	Assets attributed to the segment
Capital expenditure	Segment capex
Depreciation	Segment depreciation
SIC / NAICS	Segment industry classification

Citation

Cite the provider and the files, e.g.: S&P Compustat Segment files (via WRDS), accessed YYYY-MM-DD. State the tables used (for example wrds_segmerged / seg_annual), the segment types retained, and the extraction date.