We study how to improve the value-relevance of financial information for intangible-intensive firms by investigating two alternatives: capitalizing R&D expenses and disclosing intangible information. Using patent counts/citations to proxy for intangible intensity, we find that the incremental...

Firms commonly use disaggregated accounting information to facilitate efficient contracting over intangible assets. However, reliance on accounting measures creates information asymmetries and thus a role for contract audits. Using a hand-collected sample of technology licensing agreements with...

We test whether an impending change in the accounting for goodwill mitigates bias in the initial values that acquirers assign to intangible assets. Results of two experiments with experienced professional participants suggest that the new accounting alters, but does not eliminate, bias in...

We examine the relationship between intangible intensity and the accuracy of analyst forecasts. Using an international sample of 2,200 firms during 2000-2016, we show that analyst accuracy decreases significantly when intangible intensity grows. In exploring the determinants of this effect, we...

Based on the current U.S. GAAP, internally developed intangibles are not included in reported assets. Omission of an increasingly important class of assets reduces the usefulness and relevance of financial statement analysis, conducted using book value. Recent studies attempt to overcome this...

Expenditures on creation of intangible capital have increased but accounting standards have not kept pace. We investigate whether this has affected the value relevance of book value and earnings. We construct a composite measure of intangible intensity based on intangible assets capitalized on...

The traditional categorisation of expenditures evident in many firms' Charts of Accounts and the financial statements does not identify and measure expenditures on intangible investment separately from tangible investment and operating expenditures. This contrasts with the accounting for...

We investigate how the accounting treatment of intangible assets on managers' likelihood of issuing voluntary earnings guidance (MEF). We find that unrecognized intangibles (immediately expensed) are negatively associated with MEF issuance, while recognized intangibles (capitalized) show a...

Using the valuation methods proposed by, we value the internally generated intangible assets of the listed companies in DS30 index by capitalizing relevant portions of R&D, advertising and training expenses. After adjusting for the changes in book value and earnings, we show that companies...

This paper provides a different way of thinking about, and dealing with, four important issues. First, the overarching purpose of a firm involves communicating a vision, organizing to survive and prosper, working continually to develop win-win relationships, and taking care of future...