Do IFRS provide better information about intangibles in Europe ?

Sandrine Boulerne (), Jean-Michel Sahut and Frédéric Teulon
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Sandrine Boulerne: VALLOREM - Val de Loire Recherche en Management - UO - Université d'Orléans - UT - Université de Tours
Jean-Michel Sahut: CEREGE [Poitiers, La Rochelle] - Centre de recherche en gestion [EA 1722] - UP - Université de Poitiers = University of Poitiers - ULR - La Rochelle Université

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Abstract: Purpose-The purpose of this paper is to study the information content of intangible assets under IAS/IFRS when compared to Local GAAP for European listed companies. Design/methodology/approach-The paper employs multivariate regression models for a sample of 1855 European listed firms in a six-year period, from 2002 to 2004 in Local GAAP and from 2005 to 2007 in IAS/IFRS to investigate the empirical relationships between market value of European firms and book value of their intangible assets. Findings-The results suggest that the book value of other intangible assets of European listed firms is higher under IFRS than Local GAAP and has more informative value for explaining the price of the share and stock market returns. European investors, however, consider the financial information conveyed by capitalized goodwill to be less relevant under IFRS than with Local GAAP. Thus, identified intangible assets capitalized on European company balance sheets provide more value-relevant information for shareholders than unidentified intangible assets that have been transferred into goodwill, with the exception of Italian and Finnish investors. Originality/Value-The paper adds to the existing literature on IFRS by documenting the association between the market value of European listed firms and the book value of their goodwill and other intangibles assets. The study complements prior studies by demonstrating that country differences persist despite the use of common accounting standards and that Legal and regulatory country characteristics as well as market forces could still have a significant impact on the value relevance of accounting data.

Keywords: IFRS; prices; Priees; Europe Paper type Research paper; accounting standards; intangible assets; goodwill; returns (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02099254v1
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Citations: View citations in EconPapers (11)

Published in Review of Accounting and Finance, 2011, ⟨10.1108/1475770lllll55798⟩

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Related works:
Working Paper: Do IFRS Provide Better Information About Intangibles in Europe ? (2014)
Journal Article: Do IFRS provide better information about intangibles in Europe? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-02099254

DOI: 10.1108/1475770lllll55798

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