Global Value Relevance of Intangibles

Scholer F

Published on: 2020-02-25


We isolate the intangible-resource related accounting numbers and study the value relevance contribution of intangibles across countries and culture, and across different accounting regimes. In contrast to previous value relevance studies, our study is a global cross-country study. From the global ORBIS-database, we selected all listed non-financial with non-negative equity and applicable intangible assets and R&D information in the last available financial year, which left us with 22,372 companies from 113 different countries. For our categorisation of cultural differences, we used Hofstede’s cultural indexes adapted to Gray’s accounting values, and using information from PWC we established a categorisation of each country’s accounting regime reflecting if IFRS is required, permitted, or disallowed for listed companies in each country. For our study we used the Ohlson (1995) framework when we separated and evaluated intangibles using specific accounting items. We find uniform attitudes towards mapping of intangibles into prices in the four accounting regimes identified, despite differences in culture and economic situation in different countries. Consequently, the production of completely comparable annual reports across culturally different countries by use of some common global set of accounting standards seems unnecessary.