Disclosure of intangible liabilities: comparative study of the banking sectors in Panama and Colombia
Journal of Applied Accounting Research
ISSN: 0967-5426
Article publication date: 26 June 2020
Issue publication date: 13 November 2020
Abstract
Purpose
This research examines the likelihood that Panamanian and Colombian banks listed on their respective stock exchanges voluntarily disclose intangible liabilities based on such variables as their size, profitability, indebtedness, age and growth. The presented findings concur with agency theory, signalling theory and the owner-cost theory.
Design/methodology/approach
The authors propose a probabilistic model to test the influence of size, profitability, indebtedness, age and growth on the disclosure of intangible liabilities. The dependent variable, the disclosure index, was constructed from a dichotomous approach using Harvey and Lusch's (1999) model, which has 24 characteristics, plus six that we added in our research. These were grouped into four categories: procedures, human activity, information and organisational structure.
Findings
Banks in Panama and Colombia with a larger size, higher profitability, lower age and higher growth are more likely to disclose more information about their intangible liabilities. However, indebtedness does not serve as a determinant of the disclosure of these liabilities, even though its relationship is negative.
Research limitations/implications
The limitation of the research was the voluntary disclosure of information about these liabilities on firms' websites.
Practical implications
The contributions of this research are as follows. First, we used an intangible asset disclosure methodology to verify the disclosure of intangible liabilities, in line with Harvey and Lusch's model, as well as providing another six indicators, thereby producing an extended model. Second, being the first empirical research to study the disclosure of intangible liabilities in Panama and Colombia opens a door to future research on this topic.
Social implications
This research provides a significant practical contribution to society because banks listed on public stock markets, understanding that undisclosed intangible liabilities lead to opportunity costs in their profitability, might tend to disclose more information, thus promoting greater transparency in the market.
Originality/value
The main contribution of this research is applying an intangible asset disclosure methodology to the disclosure of intangible liabilities, following Harvey and Lusch's (1999) model, as well as the creation of an expanded model.
Keywords
Acknowledgements
This paper forms part of a special section “Role of Accounting in Managing Organizations: Vision from Ibero-America”, guest edited by David Naranjo-Gil, Antonio Davila, and Nikola Petrovic.The research was funded by the Secretaría Nacional de Ciencia y Tecnología (SENACYT of Panama) and the Universidad de Panamá by the Vice Rectory of Research and Postgraduate Studies. The project received logistical and financial support from the Universidad de San Buenaventura Cali, within the framework of the research of the project ‘Environmental assets and productivity in the Andean Community of Nations (CAN), Panama and Mexico: A vision from the knowledge economy’ with ID 34216048.
Citation
Herrera Rodríguez, E.E. and Ordóñez-Castaño, I.A. (2020), "Disclosure of intangible liabilities: comparative study of the banking sectors in Panama and Colombia", Journal of Applied Accounting Research, Vol. 21 No. 4, pp. 635-656. https://doi.org/10.1108/JAAR-09-2018-0157
Publisher
:Emerald Publishing Limited
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