Economic Properties of Recognized Intangibles under Domestic Accounting Standards: Evidence from European Capital Markets
Escaffre, Lionel; Ramond, Olivier; Casta, Jean-François (2008), Economic Properties of Recognized Intangibles under Domestic Accounting Standards: Evidence from European Capital Markets, The Illinois International Accounting Symposium, 2008-06, Warsaw, Pologne
Type
Communication / ConférenceExternal document link
http://halshs.archives-ouvertes.fr/halshs-00681592Date
2008Conference title
The Illinois International Accounting SymposiumConference date
2008-06Conference city
WarsawConference country
PolognePages
45
Metadata
Show full item recordAbstract (EN)
This study investigates whether European firms reporting under domestic GAAPs exhibit major differences while examining the relationship between their economic (financial, operating and competitive) performance and their recognized intangible investment (RII). Using a five-European-country sample including listed firms from UK, Germany, France, Italy and Spain, over the pre-IFRS compliance period 1993-2004, we first provide evidence that, under any domestic GAAPs, investors adopt a short-term perspective or "myopic view" while constructing their portfolios by penalizing firms with high RII. Secondly, contrary to the resource-based view, our results suggest that RII do not underpin better competitive position inside a specific industrial. Finally, our findings clearly support the idea that EU continental accounting standards, while opposed to Anglo-Saxon settings, ease the relationship existing between RII and firm operating performance. This last result would suggest that IAS adoption could lead to disconnect operating margins from RII and subsequently challenge the widespread claim that IAS help produce higher-quality reporting about a firms' operating activities.Subjects / Keywords
Intangibles; Goodwill; R&D; Recognition; Domestic GAAPs; Usefulness; Relevance; Informativeness; Financial Reporting; European Capital MarketsRelated items
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