Voluntary disclosure of intangibles among Australian publicly listed companies

This study examines the disclosure of intangibles in the annual reports and the prospectuses to establish evidence that established firms tend to increase disclosure of intangibles information to reduce information asymmetry when they intend to issue equity. It is prompted by the fact that traditional financial reporting has been criticised for not being able to capture the intangibles value drivers in the new economy such as knowledge assets, human resources and customer satisfaction. The literature links the disclosure of information to cost of capital by providing evidence that managers are more forthcoming with voluntary disclosure when they frequently access the capital market. The evidence from the preliminary testing of the annual reports and prospectuses support the hypothesis that companies disclose a variety of intangibles information. However, there are no substantial statistics or any study that links the relationship between annual reports disclosure and disclosure of intangibles in the prospectus. This paper is presented as work in progress but it is hoped that the extended data collection and analysis will add to the current body of literature.