Adoption of International Financial Reporting Standards: Impact on the Value Relevance of Intangible Assets

Australian Accounting Review, Vol. 18, No. 46, pp. 237-247, 2008

32 Pages Posted: 5 Jan 2011

See all articles by Keryn Chalmers

Keryn Chalmers

Monash University - Department of Accounting

Greg Clinch

Independent

Jayne M. Godfrey

University of Auckland

Date Written: May 19, 2008

Abstract

We examine whether the value relevance of reported intangibles differs between financial reporting regimes pre- and post- adoption of Australian equivalents to International Financial Reporting Standards, AGAAP and AIFRS respectively. Using AIFRS and AGAAP measures of goodwill and identifiable intangible assets for the same financial year and testing their association with share prices, we find evidence that AIFRS generally conveys incremental useful information for investors about goodwill. For aggregated identifiable intangible assets there is no evidence that AIFRS conveys information beyond that in AGAAP. In contrast, we find evidence that AGAAP provides incremental information for investors in relation to identifiable intangibles, but not goodwill.

Keywords: Intangible Assets, IFRS, Value relevance

JEL Classification: M40, M41

Suggested Citation

Chalmers, Keryn and Clinch, Greg and Godfrey, Jayne M., Adoption of International Financial Reporting Standards: Impact on the Value Relevance of Intangible Assets (May 19, 2008). Australian Accounting Review, Vol. 18, No. 46, pp. 237-247, 2008. Available at SSRN: https://ssrn.com/abstract=1734571

Keryn Chalmers

Monash University - Department of Accounting ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
+61-3-9903-2867 (Phone)
+61-3-9903-2422 (Fax)

Greg Clinch (Contact Author)

Independent

No Address Available

Jayne M. Godfrey

University of Auckland ( email )

12 Grafton Road
Auckland, 1010
New Zealand

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