Construction of intellectual capital – the case of purchase analysis

Construction of intellectual capital – the case of purchase analysis Purpose – The purpose of this paper is seek to analyze how models emanating from the managerial discourse of intellectual capital (IC) relate to how firms disclose IC in accordance with International Financial Reporting Standards Business Combinations (IFRS3) in financial statements. Design/methodology/approach – A qualitative and quantitative analysis of the purchase analyses disclosed by Swedish listed companies in their financial statements during the first year of application of IFRS3 is conducted. Findings – Five main findings result from this investigation. First, the relevance of IC in business combination is confirmed. Second, only a few intangibles are specifically identified and most of them are included within goodwill. Third, a large variety of labels are used when disclosing intangibles. Fourth, synergies represent the most frequent explanation of the goodwill generated by the business combination. Finally, the models examined for guiding firms' reporting on intangibles in the annual report need to be further developed. Originality/value – The research is an investigation of the first year of application of a new accounting principle which underlies the analysis of intangibles and which represent an opportunity to concretely apply the otherwise mainly theoretical studies carried out by the IC community. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Construction of intellectual capital – the case of purchase analysis

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Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
1401-338X
DOI
10.1108/14013380910948090
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is seek to analyze how models emanating from the managerial discourse of intellectual capital (IC) relate to how firms disclose IC in accordance with International Financial Reporting Standards Business Combinations (IFRS3) in financial statements. Design/methodology/approach – A qualitative and quantitative analysis of the purchase analyses disclosed by Swedish listed companies in their financial statements during the first year of application of IFRS3 is conducted. Findings – Five main findings result from this investigation. First, the relevance of IC in business combination is confirmed. Second, only a few intangibles are specifically identified and most of them are included within goodwill. Third, a large variety of labels are used when disclosing intangibles. Fourth, synergies represent the most frequent explanation of the goodwill generated by the business combination. Finally, the models examined for guiding firms' reporting on intangibles in the annual report need to be further developed. Originality/value – The research is an investigation of the first year of application of a new accounting principle which underlies the analysis of intangibles and which represent an opportunity to concretely apply the otherwise mainly theoretical studies carried out by the IC community.

Journal

Journal of Human Resource Costing & AccountingEmerald Publishing

Published: Feb 23, 2009

Keywords: Intellectual capital; Financial reporting; Disclosure; Goodwill accounting; Sweden

References

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