Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible...

70.2K

Verified Solution

Question

Accounting

Accounting for intangible assets. Discuss relevance versusreliability as they apply to reporting on the intangible assets ofthe firm.

Answer & Explanation Solved by verified expert

3.9 Ratings (463 Votes)

The intangibles value relevance studies have known an important interest since the early of 90s Sougiannis 1994 concluded that investors place a high value on intangible investments he estimated that on average a onedollar increase in RD expenditures produces a fivedollar increase in market value He distinguished between the indirect effect when RD expenditures affect market values through earnings and the direct effect that reflects new information conveyed by RD He assessed also that on average the indirect effect is more than the direct effect Aboody and Lev 1998 found that capitalized software amounts summarize relevant information they associate with market variables and future earnings Seethamraju 2003 showed significant abnormal returns related to brands capitalized as a part of businesses combination He observed abnormal returns with companies that reported quantitative information more than those that reported only qualitative information Goodwin and Ahmed 2006 confirmed the indirect effect of intangibles on market values they found that intangible assets increase the value relevance of earnings Zhao 2002 showed that the reporting of total RD costs increases the association of stock price with accounting earnings and book values in countries with complete RD See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!

Become a Member

Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible...

70.2K

Verified Solution

Question

Accounting

Accounting for intangible assets. Discuss relevance versusreliability as they apply to reporting on the intangible assets ofthe firm.

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Other questions asked by students

A researcher wishes to see whether there is any difference in the weight gains of athletes...

Describe the following conditions: Hypernatremia/Hyponatremia Hyperkalemia/Hypokalemia Diabetes insipidus respiratory acidosis respiratory alkalosis metabolic acidosis metabolic alkalosis What hormone regulates potassium? What is a...

Design a comb filter in MATLAB that meets the following specifications: it eliminates 5 harmonics of 100Hz it...

What is Petty Cash and how is it represented on the balance sheet? What types of...

Why is it necessary to have separate pathways for breaking down glucose and synthesizing glucose...

4 Find the area of an equilateral triangle that has side lengths of 8 cm...

Maximu Use the graph to the right which shows the daily Average low and high...

Use the trapezoidal rule with n 3 to approximate 9 x4 dx T3 Round the...

Problem 17-3A...

Bunny Helpers, Inc., has just received...

Assume (1) a predetermined overhead rate of $8.00 per machine-hour, (2) actual machine-hours worked during...

Lala Land Corporation (LLC) intends to purchase a piece of machinery for $1,000,000. The project...