IPRIA Working Paper Series
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Intellectual Property Research Institute of Australia Working Paper No. 04/2005 Capitalised Intangibles and Financial Analysis by Zoltan Matolcsy and Anne Wyatt Date: March 2005 Abstract: This paper examines whether firms that capitalise a higher proportion of their firm’s underlying intangible assets have higher analyst following, lower dispersion of analysts’ earnings forecasts and more accurate earnings forecasts relative to firms that capitalise a lower proportion. The study contributes evidence on this issue from the Australian setting where capitalisation of intangible assets is common. Barth et al (2001) and Barron et al (2002) find higher analyst following for firms with higher mostly unrecognized intangible assets. In the Australian setting, we find evidence that suggests managements’ accounting choices are instrumental in this relation. The results suggest companies experience relatively higher analyst following, lower forecast dispersion and higher forecast accuracy when the firms underlying intangible assets are sufficiently certain to permit management to capitalise intangible assets. Downloads: PDF [513K] |
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