Intellectual Capital Reporting between a Developed and Developing Nation

Purpose - This paper examines the patterns of intellectual capital reporting (ICR) of large listed firms in a developing nation, Sri Lanka. The aim of this study is to highlight the differences in ICR practice between developing and developed nations. Design/Methodology/Approach - The paper begins by examining each of the top 30 firms by market capitalization listed on the Colombo stock exchange in 1998/1999 and 1999/2000. Using the content analysis method, it reviews the annual reports of these firms to determine the types of intellectual capital (IC) items reported in Sri Lanka. It then compares these findings with a similar study undertaken in Australia during the same period (Guthrie and Petty, 2000). Findings - ICR differences were identified between Sri Lankan and Australian firms, and it is argued that that these differences can be attributed to economic, social and political factors. The paper highlights the need for a uniform ICR definition and a reporting framework that provides comparative and consistent reporting under the auspices of a regulatory body.Practical Implications - This study highlights important policy issues for Australia, Sri Lanka and other nations. These issues are even more pertinent in the light of the gradual international adoption of the International Financial Reporting Standards (IFRS), formulated by the International Accounting Standards Board (IASB).Originality/Value - Most papers on intellectual capital reporting have focused on firms in developed countries. This study offers insights into comparative reporting practices between a developed and a developing country