Abstract
The present study aims to identify the degree of compliance with the intangible assets disclosure requirements outlined in the Accounting and Financial Reporting Standard (Norma Contabilistica de Relato Financeiro – NCRF) 6 - Intangible Assets. It also seeks to analyse the factors influencing compliance with intangible assets mandatory disclosure requirements. An analysis of the 500 largest companies ranked by Exame Magazine, 2010 , which are subject to the general Portuguese Accounting Standards System (Sistema de Normalizacao Contabilistica - SNC), was conducted to check whether their Financial Statements for the years 2010 (transition year) and 2011 were made available on their websites. The methodology chosen to answer the research questions and achieve the proposed objectives was the content analysis of the financial statements of a sample of 37 Portuguese unlisted companies. The data collected in 2010 and 2011 allowed the construction of an index of intangible assets and the identification of disclosure explanatory factors. We tested six hypotheses for a possible association between the disclosure index and six explanatory variables through analysis, descriptive statistics, normality, differences in means, correlation and regression. Our results show an average of 30% in the disclosure index for intangible assets. Contrary to what was expected, results confirm that the adoption of SNC did not cause a higher level of disclosure over time. Companies’ size is the most influencing factor, indicating that larger companies disclose information on intangible assets basically to reduce agency costs, political costs related to their public visibility, and in such a way manage the relationship with their relevant stakeholders.
Highlights
Knowledge is considered the new and main source of value for organisations and it can be included in the concepts of either intellectual capital or intangible assets. Oliveira, Rodrigues, and Craig (2006) argue that intellectual capital comprises several components
This study focuses on the level of compliance with the requirements of intangible assets disclosure outlined in NCRF6, as well as its explanatory factors, for 2010 and 2011, using the annual reports collected from a population composed by the 500 largest Portuguese firms ranked by Exame Magazine in 2010, and which are subject to the new SNC
At least one company shows no results for intangible assets disclosure and the maximum level of intangible assets disclosure is 0.71; The average value of total assets is approximately EUR 525 million, there is a wide value variation in this variable; Return on assets varies between a minimum value of 9.90 negative and a maximum of 0.79 positive
Summary
Knowledge is considered the new and main source of value for organisations and it can be included in the concepts of either intellectual capital or intangible assets. Oliveira, Rodrigues, and Craig (2006) argue that intellectual capital comprises several components (knowledge of human resources, experience, information, and learning abilities). Knowledge is considered the new and main source of value for organisations and it can be included in the concepts of either intellectual capital or intangible assets. Oliveira, Rodrigues, and Craig (2006) argue that intellectual capital comprises several components (knowledge of human resources, experience, information, and learning abilities). There is no consensus in defining intellectual capital and intangible assets. In this regard, the Meritum (2002) establishes that intellectual capital is used to identify those organisational resources capable of generating future economic benefits, with no physical substance, and which can either be or not recognised in the financial statements. The concept of intangible assets used in accounting is subject to specific accounting requirements
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