IFRSs and accounting for intangible assets: the Telecom Italia case

Abstract

Purpose – The purpose of this paper is to show whether and how International Financial Reporting Standards (IFRSs) are able to improve the quality of financial accounting information concerning intangible assets.Design/methodology/approach – Being part of a wider project investigating the ability of IFRSs to improve accounting information concerning intangibles, this paper analyses the application of some IFRSs' key innovations to Telecom Italia. Considered innovations include two of the most relevant areas of change between Italian accounting principles to IFRSs, i.e. business combinations and accounting for intangible assets with indefinite useful life. Quality of accounting information is measured through four key parameters: correctness, transparency, prudence, and timeliness. Representation provided by Italian accounting principles and US GAAP of selected accounting events are compared in terms of the four key parameters, and differences in accounting information quality are systematically observed.F...