Kai Richter

Purpose:
The capitalisation of intangible investments is discussed controversially in the financial accounting literature. International accounting standards are concerned with this issue and generally demand more intellectual capital to be recognised on the face of the balance sheet. If investors and analysts already gather monetary information about intangible assets from the financial report and find such information useful, then the necessity to complement such information with… Mehr anzeigen

Purpose:
The capitalisation of intangible investments is discussed controversially in the financial accounting literature. International accounting standards are concerned with this issue and generally demand more intellectual capital to be recognised on the face of the balance sheet. If investors and analysts already gather monetary information about intangible assets from the financial report and find such information useful, then the necessity to complement such information with voluntary intellectual capital disclosure will diminish. Accordingly, there should be an association between recognized intangible assets and voluntary intellectual capital disclosure.

Methodology:
We analyse the voluntary disclosure of 264 investor conference and roadshow presentations of German DAX 30 firms in the year 2001, 2003, 2005, and 2007. We apply regression models to analyse the association between recognition of intangible assets and voluntary intellectual capital disclosure and control for other determinants of voluntary disclosure.

Findings:
We find that the magnitude of recognized intangible assets is significantly and negatively associated with the quantity and quality of voluntary intellectual capital disclosure. We show that this association is mainly driven by goodwill accounting. In more detailed analyses we find different directions (positive, negative and insignificant) of this relationship for different categories of intellectual capital.

Implications:
Future studies on voluntary intellectual capital disclosure need to consider recognized intangible assets as a determinant to avoid omitted variable problems.

Originality/value:
The paper provides primary evidence on the association between recognized intangible assets and voluntary intellectual capital disclosure. Weniger anzeigen

We analyze firms’ voluntary disclosure of intellectual capital in a setting of presentations to analysts and investors. Firms use presentations to analysts and investors as an additional means of reporting. Due to lesser restrictions of this kind of reporting and also due to the private channel disclosure setting of such presentations, firms are able to highlight certain issues which they think to be important for interpretation and forecasting of firm success. In such a setting we can assess… Mehr anzeigen

We analyze firms’ voluntary disclosure of intellectual capital in a setting of presentations to analysts and investors. Firms use presentations to analysts and investors as an additional means of reporting. Due to lesser restrictions of this kind of reporting and also due to the private channel disclosure setting of such presentations, firms are able to highlight certain issues which they think to be important for interpretation and forecasting of firm success. In such a setting we can assess the benefit-cost relation underlying these disclosure decisions. The sample consists of German DAX30 firms, which are analyzed for the years 2001, 2003, 2005, and 2007, resulting in a total of 271 observations. We calculate quantitative and qualitative disclosure indices and also analyze whether time, industry and type of presentation influence intellectual capital disclosure. Findings show that customer capital, human capital, and process capital are reported more often than other intellectual capital categories. Industry and type of presentation are strongly related to disclosure indices. There is also a weak significant relation between time and disclosure index. Overall, firms tend to prefer qualitative voluntary disclosure of intellectual capital and only carefully disclose quantitative data. This suggests that the benefit-cost relation of quantitative reporting is negative. Weniger anzeigen