Open AccessMateriality and disclosure quality of identifiable intangible assets: Evidence from Germany
Author(s) -
Tobias Nell,
Martin Tettenborn,
Silvia Rogler
Publication year - 2015
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv12i2c3p3
Subject(s) - materiality (auditing) , voluntary disclosure , accounting , business , german , equity (law) , index (typography) , quality (philosophy) , actuarial science , law , political science , philosophy , epistemology , aesthetics , archaeology , world wide web , computer science , history
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