The purpose of this paper is to analyse the relationship between financial statement informativeness (FSI) and intellectual capital disclosure (ICD).
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.
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.
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.
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.
The authors gratefully acknowledge the support of the CPA-Canada Accounting and Governance Research Centre at the University of Ottawa.
Maaloul, A. and Zéghal, D. (2015), "Financial statement informativeness and intellectual capital disclosure: An empirical analysis", Journal of Financial Reporting and Accounting, Vol. 13 No. 1, pp. 66-90. https://doi.org/10.1108/JFRA-04-2014-0023
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