You are here

A study on intangible assets disclosure: An evidence from Indian companies

Journal Name:

Publication Year:

Abstract (2. Language): 
India has emerged at the top of the pedestal in the present knowledge-driven global marketplace, where intangible assets hold much more value than physical assets. The objective of this study is to determine the extent of intangible asset disclosure by companies in India Design/methodology/approach: This study relates to the years 2003-04 and 2007-08 and is based on 243 companies selected from BT-500 companies. The annual reports of these companies were analyzed using content analysis so as to examine the level of disclosure of intangible asset information. Intangible assets disclosure index based on the intangible assets framework as given by Sveiby (1997) and as used and tested by Guthrie and Petty (2000) and many other subsequent studies was modified and used for this study. Findings: The results showed that external capital is the most disclosed intangible asset category with a disclosure score of 37.90% and 35.83% in the years 2003-04 and 2007-08 respectively. Infosys technologies Ltd. is the company with the highest intangible assets reporting for both the years (2003-04: 68.52%, 2007-08: 81.48%). Further the reporting of intangible assets is unorganized and unsystematic. There is lack of appropriate framework for disclosing intangible assets information in the annual reports.Originality/value: This is perhaps the first comprehensive study on intangible assets disclosure based on a large sample of the companies from India. Literature reveals that now the intangible assets play relatively an increasingly significant role in the decision making process of various users of corporate reports. This study shows that the overall disclosure of intangible assets is low in India. Thus this study may be of value to the corporate sector in India to explore the areas of intangible assets disclosure so that they can provide useful and relevant information to the users of annual reports.



ABEYSEKERA, I.; GUTHRIE J. (2005). An Empirical Investigation of Annual Reporting Trends of Intellectual Capital in Sri Lanka. Critical Perspectives on Accounting, 16(2): 151-163. doi:10.1016/S1045-2354(03)00059-5
ALI, M.; KHAN, H.; FATIMA, Z.K. (2008). Intellectual Capital Reporting Practices: A Study on Selected Companies in Bangladesh. Journal of Business Studies, 29(1): 81-104.
APRIL, K.A.; BOONIA, P.; DEGLON, D. (2003). Intellectual Capital measurement and reporting: establishing a practice in South African inning. Journal of Intellectual Capital, 4(2):165-180. doi:10.1108/14691930310472794
BONTIS, N.; CROSSAN, M.; HULLAND, J. (2002). Managing an Organizational Learning System by Aligning Stocks and Flows. Journal of Management Studies, 39(4); 437-469. doi:10.1111/1467-6486.t01-1-00299
Intangible Capital, 2011 – 7(1): 1-30 - ISSN: 1697-9818
A study on intangible assets disclosure: An evidence from Indian companies 26
S. Chander – V. Mehra
BONTIS, N. (2003). Intellectual Capital disclosures in Canadian Corporations. Journal of Human Resource Costing and Accounting, 7(1): 9-20. doi:10.1108/eb029076
BOTOSAN, C. (1997). Disclosure level and the cost of equity capital. Accounting Review, 72(3): 323-349.
BOZZOLAN, S.; FAVOTTO, F.; RICCERI, F. (2003). Italian annual intellectual capital disclosure. Journal of Intellectual Capital, 4(4): 543-558. doi:10.1108/14691930310504554
BRENNAN, N. (2001). Reporting intellectual Capital in annual reports: evidence from Ireland. Accounting, Auditing and Accountability Journal, 14(4): 423-436. doi:10.1108/09513570110403443
EDVINSSON, L.; MALONE, M.S. (1997). Intellectual Capital: Realizing Your Company’s True Value by Finding Its Hidden Brainpower. New York: Harper Business.
FASB (1978). Statements of Financial Accounting Concepts – 1 on Objectives of Financial Reporting by Business Enterprises.
GARCÍA-PARRA, M.; SIMO, P.; MUNDET, J.; GUZMAN, J. (2004). Intangibles: assets and liabilities. Intangible Capital, 0(3): 70-86.
GARCÍA-PARRA, M.; SIMO, P.; SALLAN, J.M.; MUNDET, J. (2009). Intangible liabilities: beyond models of intellectual assets. Management Decision, 47(5): 819-830. doi:10.1108/00251740910960141
GERPOTT, T.J.; THOMAS, S.E.; HOFFMANN, A.P. (2008). Intangible asset disclosure in the telecommunications industry. Journal of Intellectual Capital, 9(1): 37-61. doi:10.1108/14691930810845795
GOH, P.; LIM, K. (2004). Disclosing intellectual capital in company annual reports. Evidence from Malaysia. Journal of Intellectual Capital, 5(3): 500-510. doi:10.1108/14691930410550426
Intangible Capital, 2011 – 7(1): 1-30 - ISSN: 1697-9818
A study on intangible assets disclosure: An evidence from Indian companies 27
S. Chander – V. Mehra
GUTHRIE, J.; PETTY, R. (2000). Intellectual Capital: Australian annual reporting practices. Journal of Intellectual Capital, 1(3): 241-251. doi:10.1108/14691930010350800
GUTHRIE, J.; PETTY, R.; JOHANSON, U. (2001). Sunrise in the Knowledge economy: Managing, measuring and reporting intellectual capital. Accounting, Auditing and Accountability Journal, 14(4): 365-382. doi:10.1108/EUM0000000005869
GUTHRIE, J.; PETTY, R.; YONGVANICH, K.; RICCERI, F. (2004). Using Content Analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5(2): 282-293. doi:10.1108/14691930410533704
GUTHRIE, J.; PETTY, R.; RICCERI, F. (2006). The voluntary reporting of intellectual capital: Comparing evidence from Hong Kong and Australia. Journal of Intellectual Capital, 7(2): 254-271. doi:10.1108/14691930610661890
IFAC (1998). Measurement and Management of Intellectual Capital. New York, NY: IFAC.
KAMATH, B. (2008). Intellectual Capital Disclosure in India: content analysis of “Teck” firms. Journal of Human Resource Costing and Accounting, 12(3): 213-224. doi:10.1108/14013380810919859
LEV, B. (2001). Intangibles. Management, Measurement, and Reporting. Washington D.C: The Brookings Institution.
MECA, E.G.; MARTINEZ, I., (2005). Assessing the quality of disclosure on intangibles in the Spanish Capital Market. European Business Review, 17(4): 305-313. doi:10.1108/09555340510607352
MERITUM (2000). Guidelines for the measurement and disclosure of intangibles., consulted: 2007-October 15th.
Intangible Capital, 2011 – 7(1): 1-30 - ISSN: 1697-9818
A study on intangible assets disclosure: An evidence from Indian companies 28
S. Chander – V. Mehra
MILNE, M.; ADLER, R. (1999). Exploring the reliability of social and environmental disclosures content analysis. Accounting, Auditing & Accountability Journal, 12(2): 237-256. doi:10.1108/09513579910270138
OLIVEIRA, L.; RODRIGUES, L.L.; CRAIG, R. (2006). Firm–Specific determinants of intangibles reporting: evidence from the Portuguese stock market. Journal of Human Resource Costing and Accounting, 10(1): 11-33. doi:10.1108/14013380610672657
OLIVERAS, E.; KASPERSKAYA, Y. (2005). Reporting Intellectual Capital in Spain., consulted: 2009- December 15th.
ORDÓÑEZ DE PABLOS, P. (2005). Intellectual capital reports in India: lessons from a case study. Journal of Intellectual Capital, 6(1): 141-149. doi:10.1108/14691930510574717
STEENKAMP, N. (2007). Intellectual Capital Reporting in New Zealand: refining content analysis as a research method. PhD Thesis, Auckland University of Technology, Auckland (unpublished).
SUJAN, A.; ABEYSEKERA, I. (2007). Intellectual Capital Reporting practices of the top Australian firms. Australian Accounting Review, 17(2): 71-83. doi:10.1111/j.1835-2561.2007.tb00445.x
SVEIBY, K.E. (1997). The New Organisational wealth. Managing and measuring Knowledge-Based assets. New York, NY: Berrett-Koehler.
TEECE, D.J. (2000). Strategies for Managing Knowledge Assets: The role of Firm Structure and Industrial Context. Long Range Planning, 33: 35-54. doi:10.1016/S0024-6301(99)00117-X
VERGAUWEN, P.G.M.C.; ALEM, F.J.C. (2005). Annual report IC disclosures in the Netherlands, France and Germany. Journal of Intellectual Capital, 6(1): 89-104. doi:10.1108/14691930510574681
Intangible Capital, 2011 – 7(1): 1-30 - ISSN: 1697-9818
A study on intangible assets disclosure: An evidence from Indian companies 29
S. Chander – V. Mehra
WONG, M.; GARDENER, C. (2004). Intellectual Capital Disclosure: New Zealand evidence. Journal of Economic Literature,, consulted: 2008-July 31.
WOODROCK, J.; WHITING, R.H. (2009). Intellectual capital disclosures by Australian companies, accepted for presentation at the AFAANZ Conference., consulted: 2009-November 29.

Thank you for copying data from