The Value Relevance of Intangible Assets and the Mandatory Adoption of IFRS
University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Lancaster University - Department of Accounting and Finance
Luiss Guido Carli University
University of Bologna - Department of Management
June 1, 2009
Using a sample of Italian publicly traded firms in the period of 1996-2006, we analyze whether and to what extent the mandatory adoption of IFRS has affected the value relevance of intangible assets. Prior literature has claimed that IFRS adoption should improve the quality of accounting information and reduce information asymmetries. We find a statistically significant decrease in the value relevance of intangible assets, and in particular of goodwill, after the IFRS adoption. In contrast, in the Italian setting investors’ evaluation of R&D expenditures seems not to be value relevant under either accounting standards.
Number of Pages in PDF File: 42
Keywords: intangible assets, IFRS adoption, goodwill, impairment test, R&D, IAS 38
JEL Classification: M41, M44
Date posted: May 9, 2010
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