Research output

Article in Journal

Mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets: Value relevance and impact on analysts' forecasts (Forthcoming/Available Online)

Citation
André P, Dionysiou D & Tsalavoutas I (2017) Mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets: Value relevance and impact on analysts' forecasts (Forthcoming/Available Online), Applied Economics.

Abstract
Drawing on a large sample of European firms, we examine whether variant compliance levels with mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets are value relevant and affect analysts’ forecasts. Our results indicate a mean (median) compliance level of about 84% (86%) but high variation among firms; and disclosure levels regarding IAS 36 being much lower than those regarding IAS 38. In depth analysis reveals that non-compliance relates mostly to proprietary information and information that reveals managers’ judgment and expectations. Furthermore, we find a positive (negative) relationship between average disclosure levels and market values (analysts’ forecast dispersion). Results, however, hold more specifically for disclosures related to IAS 36, and these also improve analysts’ forecast accuracy. Our findings add knowledge regarding the economic consequences of mandatory disclosures, have an appeal to regulators and financial statement preparers, and reflect on the IASB’s concerns to increase the guidance and principles on presentation and disclosure.

Keywords
Mandatory disclosures; value relevance; analysts’ forecasts; intangibles; impairments; IAS 36; IAS 38

StatusIn press
AuthorsAndré Paul, Dionysiou Dionysia, Tsalavoutas Ioannis
Publication date online26/06/2017
Date accepted by journal06/06/2017
PublisherTaylor and Francis
ISSN 0003-6846
LanguageEnglish

Journal
Applied Economics

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