Recognition and Disclosure of Intangible Assets - A Meta-Analysis Review
57 Pages Posted: 13 Feb 2018
Date Written: February 8, 2018
The knowledge- and Internet-based economy demands a re-examination of the accounting treatment for intangibles and a thorough understanding of the results on this topic. We review the literature on internally developed intangible assets using meta-analysis techniques which allow us to highlight the consensus and areas of disagreement in quantitative empirical results. We find relatively robust positive meta-relationships between (1) firm size and intangible-related disclosure, (2) R&D expenses and the firm’s stock market returns, and (3) R&D expenses and firm performance volatility. Some relations often cited in the literature do not seem to hold, namely the correlations of R&D expense with analyst earnings forecast errors and with share price. However, we note that after considering over one hundred accounting papers, only 35 percent meet the basic criteria to permit quantitative aggregation of results via meta-analysis. Even when aggregation is possible, the studies are often heterogeneous, therefore denying a reliable interpretation of averages.
Keywords: Intangible assets; Research and development; Capitalization; Disclosure; Quantitative literature review; Meta-analysis
JEL Classification: M4
Suggested Citation: Suggested Citation