The relevance of the information about intangibles: Some determinants
Abstract
This study treats the issue of the relevance of the accounting information about intangibles (assets and expenditures). Our findings show that the relevance is found and determined by the introduction of other information. This information represents the financial constraints as motivation of manipulation and the implication degree of managers due to granted stocks options. Under low level of financial constraints, the investor judges that the value of intangibles assets recognized in the balance sheet is reliable but this information remains widely insufficient to modify its valuation. However, this low level transmit to the market a signal of the failure of the R&D projects because it is predicted that these projects will be unable to realize sufficient future cash flows to honor the financial commitments of the company. Besides, we found that the information about recognized intangible assets and R&D expenditures is well appreciated by the market for the firms which grant more stocks options. So, the granting of stocks options represents a signal to the market on the efficiency of the managers and their implication in the risk of the committed investments.
Full Text:
PDFDOI: https://doi.org/10.5296/ijafr.v2i1.1665
Refbacks
- There are currently no refbacks.
Copyright (c) 2012 Houneida Ben Brahim, Mounira Ben Arab
![Creative Commons License](http://i.creativecommons.org/l/by/4.0/88x31.png)
This work is licensed under a Creative Commons Attribution 4.0 International License.
International Journal of Accounting and Financial Reporting ISSN 2162-3082
Copyright © Macrothink Institute
'Macrothink Institute' is a trademark of Macrothink Institute, Inc.
To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.