Financial statement informativeness and intellectual capital disclosure

Anis Maaloul and Daniel Zéghal

Journal of Financial Reporting and Accounting, 2015, vol. 13, issue 1, 66-90

Abstract: Purpose - – The purpose of this paper is to analyse the relationship between financial statement informativeness (FSI) and intellectual capital disclosure (ICD). Design/methodology/approach - – While FSI was measured as the explanatory power of financial information in explaining market value, ICD was collected through content analysis of annual reports. A sample of 126 US companies, divided into two groups – high-tech and low-tech companies – were used in this study. Empirical analysis was carried out using the Poisson regression method. Findings - – The results show a negative (substitutive) relationship between FSI and ICD, especially in high-tech companies. This indicates that companies with low FSI disclose more information about their IC in annual reports. Practical implications - – This study confirms the role of voluntary ICD as a solution towards mitigating the problem of the distortion of financial information due to the lack of accounting recognition of IC as an asset in the financial statements. Originality/value - – This is the first empirical study to analyse the relationship between FSI and ICD. Therefore, it serves as feedback to the regulators and standard-setters that recently published recommendations on voluntarily disclosing IC.

Keywords: Intellectual capital; Disclosure; Financial statement informativeness; High-tech companies; USA (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrapp:v:13:y:2015:i:1:p:66-90

DOI: 10.1108/JFRA-04-2014-0023

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