The Value Relevance of Intangible Assets and the Mandatory Adoption of IFRS

42 Pages Posted: 9 May 2010

See all articles by Serena Morricone

Serena Morricone

SDA Bocconi

Raffaele Oriani

Luiss Guido Carli University

Maurizio Sobrero

University of Bologna - Department of Management

Date Written: June 1, 2009

Abstract

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.

Keywords: intangible assets, IFRS adoption, goodwill, impairment test, R&D, IAS 38

JEL Classification: M41, M44

Suggested Citation

Morricone, Serena and Oriani, Raffaele and Sobrero, Maurizio, The Value Relevance of Intangible Assets and the Mandatory Adoption of IFRS (June 1, 2009). Available at SSRN: https://ssrn.com/abstract=1600725 or http://dx.doi.org/10.2139/ssrn.1600725

Serena Morricone (Contact Author)

SDA Bocconi ( email )

Via Bocconi 8
Milan, Milan 20136
Italy

Raffaele Oriani

Luiss Guido Carli University ( email )

Viale Romania, 32
Rome, 00196
Italy
+390685225908 (Phone)

Maurizio Sobrero

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
40126 Bologna, Bologna 40126
Italy
+39 051 2098076 (Phone)

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