The purpose of this paper is to compare the segment reporting disclosures under SFAS No. 131 with those reported the previous year under SFAS No. 14. Under SFAS No. 131, firms are required to report segments consistent with the way in which management organizes the business internally. In addition, the accounting items disclosed for each segment are defined consistent with internal segment information used to assess segment performance. For many companies, this represents a significant change from the approach used to report segments under SFAS No. 14. Under SFAS No. 14, firms were required to disclose segment information by both line‐of‐business and geographic area with no specific link to the internal organization of the company or the measurements that were used for internal decision making. As a result, many complained that the resulting disclosures were highly aggregated and of limited use for decision‐making purposes. We find that the change in segment reporting requirements under SFAS No. 131 has made a relatively significant impact on the disclosure of segment information. Over two‐thirds of the sample firms have redefined their primary operating segments upon adopting SFAS No. 131. There has also been an increase in the number of firms providing segment disclosures and companies are disclosing more items for each operating segment. For enterprise‐wide disclosures, the proportion of country‐level geographic segment disclosures has increased, while the proportion of broader geographic area segment disclosures has decreased. However, the number of firms reporting earnings by geographic area has declined greatly as this item is no longer required to be disclosed for firms reporting on a basis other than geographic area.