Materiality and Disclosure Quality of Identifiable Intangible Assets: Evidence from Germany

Corporate Ownership and Control, Vol. 12 (2), 2015, p. 381-400

Posted: 10 May 2014 Last revised: 23 Feb 2015

See all articles by Tobias Nell

Tobias Nell

Freiberg University of Technology

Martin Tettenborn

Freiberg University of Technology

Silvia Rogler

Freiberg University of Technology

Date Written: December 10, 2013

Abstract

This paper examines both the materiality of intangibles and the related disclosure quality under IFRS in the notes of firms on the German benchmark stock index DAX during the four-year period 2008-2011. As proxies, we use the relation of intangibles-to-equity (materiality) and a disclosure index of our design (disclosure quality) that measures both the volume and presentation of information. Furthermore and contrary to the majority of prior studies on the disclosure of intangibles, our index measures disclosure quality itself, and is not restricted to voluntary or mandatory disclosures. In accordance with our predictions, we find in general that intangibles are considerably material, but that the related disclosure quality is low and remains at that low level over the period analyzed. Additionally, both aspects differ widely between firms. Finally, we find support for the hypothesis that management disclosure policies place more emphasis on the amount of information than on its presentation. Our results illustrate and promote the need for the improved regulation of disclosures in the notes, as currently discussed by the major standard setters IASB and FASB.

Keywords: Disclosure Quality, Disclosure Index, Intangible Assets, IFRS

JEL Classification: M41, M48, C43, G14

Suggested Citation

Nell, Tobias and Tettenborn, Martin and Rogler, Silvia, Materiality and Disclosure Quality of Identifiable Intangible Assets: Evidence from Germany (December 10, 2013). Corporate Ownership and Control, Vol. 12 (2), 2015, p. 381-400, Available at SSRN: https://ssrn.com/abstract=2434669 or http://dx.doi.org/10.2139/ssrn.2434669

Tobias Nell (Contact Author)

Freiberg University of Technology ( email )

Schlossplatz 1
Freiberg, 09599
Germany

HOME PAGE: http://www.tu-freiberg.de

Martin Tettenborn

Freiberg University of Technology ( email )

Lessingstr. 45
Freiberg, 09596
Germany

HOME PAGE: http://www.tu-freiberg.de

Silvia Rogler

Freiberg University of Technology ( email )

Lessingstr. 45
Freiberg, 09596
Germany

HOME PAGE: http://tu-freiberg.de/fakult6/rechnungswesen-und-controlling

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