Recognition and disclosure of intangibles under international financial reporting standards
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Author (Corporation)
Publication date
2025
Type of student thesis
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Collections
Type
01A - Journal article
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Parent work
Abacus
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Series
Series number
Volume
61
Issue / Number
4
Pages / Duration
857-896
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Publisher / Publishing institution
Wiley
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Abstract
Recently, the current International Financial Reporting Standard for intangibles has been subject to criticism, with concerns of lack of comparability between acquired and internally generated intangibles and limited disclosure of unrecognized intangibles. This study aims to inform the International Accounting Standards Board of the extent of these issues by focusing on trends in recognition and disclosure of intangible items in firms that engage in acquisitions (acquisitive) and those that do not (non‐acquisitive). Our sample is based on firms listed in the UK between 2017 and 2022. Disclosure is captured through a count of relevant key words in the financial statements and accompanying notes, distinguishing between contractual, non‐contractual, and broad intangible items. We find that recognized intangible assets are on average 32% of total assets in acquisitive firms but only 9% in non‐acquisitive firms. In contrast, disclosure of non‐contractual intangibles, which include internally generated intangibles, is higher in non‐acquisitive firms, implying that they may supplement non‐recognition with higher disclosure of intangible information. We further examine the value relevance of recognized and disclosed intangibles and find that disclosure reduces the value relevance of earnings in acquisitive firms, and increases the value relevance of book value more so in non‐acquisitive firms. Overall, our evidence points to diversity in recognition and disclosure in line with recent criticism of the intangible standard and supports the need for a revisit by standard‐setters.
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ISBN
ISSN
1467-6281
0001-3072
0001-3072
Language
English
Created during FHNW affiliation
Yes
Strategic action fields FHNW
Publication status
Published
Review
peer-reviewed
Open access category
Hybrid
License
Citation
Ibrahim, S., Bowden, J., Elmarzouky, M., & Al-Kilani, M. (2025). Recognition and disclosure of intangibles under international financial reporting standards. Abacus, 61(4), 857–896. https://doi.org/10.1111/abac.70015