【精品文档】46中英文双语外文文献翻译：无形资产披露：来自约旦工业上市公司年报的证据

See discussions, stats, and author profi les for this publication at: Intangibles Disclosure: Evidence from Annual Reports of the Jordanian Industrial Public Listed Companies Chapter December 2017 DOI: 10.1007/978-3-319-49559-0_36 CITATIONS 0 READS 102 3 authors, including: Radhi Al-Hamadeen Princess Sumaya University for T echnology 9 PUBLICATIONS 9 CITATIONS SEE PROFILE Malek Alsharairi German Jordanian University 16 PUBLICATIONS 22 CITATIONS SEE PROFILE All content following this page was uploaded by Malek Alsharairi on 04 December 2017. The user has requested enhancement of the downloaded fi le. Chapter 36 Intangibles Disclosure: Evidence from Annual Reports of the Jordanian Industrial Public Listed Companies Radhi Al-Hamadeen, Malek Alsharairi and Haya Qaqish Abstract This study investigates the disclosure practices pertaining the intangible assets (IA), given the limited attention given to intangibles reporting in the developing countries. Specifi cally, this paper documents the disclosure practices, both mandatory and voluntary, related to intangibles by the industrial Jordanian fi rms, and to what extent they do report information about IA. This study con- tributes to the literature by providing empirical evidence from a developing countrys business environment. Based on relevant literature and the requirements of accounting standards (namely, IAS38), we apply a research index that consists of 24 general and technical items on 69 publicly listed companies classifi ed under the industrial sector at Amman Stock Exchange (ASE) for the year 2012. Our fi ndings suggest that most of the investigated fi rms either disclose a minimal amount of information about IA or not at all, which indicates that the concept of IA remains ambiguous and is neglected. The overall percentage of intangibles dis- closure as per the research index is only 9.7%. Consistent with the extant literature (such as Kumar 2013), our results indicate that intangibles technical disclosure is associated with the market capitalization, whereas the intangibles general disclo- sure (non-technical) is linked to the fi rms sub-sector. The fi ndings of this research raise concerns about the fi rms reporting effi ciency in communicating their ability to maintain, create and sustain innovation within their business environment on the long run. Keywords Intangible assets?IAS38?Disclosure?Industrial PLCs?Jordan R. Al-Hamadeen ( Goldfi nger 1997). Therefore, fi rms realize how important it is to disclose their IA and related activities in order to grow in value (Canibano et al. 2000). The disclosure of IA has naturally evolved as a response to the rapid growth and development of fi rms and their need to attract capital (Kampanje 2012). Accordingly, the disclosure of IA is outlined by the International Accounting Standards Board (IASB) at IAS38, which helps the capital providers to learn about the fi rms intangibles when they make economic decisions (Healy and Palepu 2001; Graham 2005; Lambert et al. 2007). IA empower companies and sustain compet- itiveness given the fact that they are relatively unique among fi rms and they are hard to be imitated (Kaplan and Norton 2004). The overwhelming European companies have at least one type of intangible asset other than goodwill (Tsalavoutas et al. 2014). Hence, the a priori is that these companies reveal more details about these assets. In the same context, the Global Intangible Tracker (GIT) confi rms that the developed countries are focusing more and more on disclosing information about intangibles. As a consequence of the mismeasurement and poor reporting of IA, there is a considerable deterioration in the informational content of key fi nancial statement items. A second consequence is the reportedly undervaluation of intangibles by companies that are intensive in intangibles (Lev 2001). Since the literature gives limited attention to the intangibles in the developing countries, this study focuses on IA disclosures in Jordan, where international accounting standards are mandated for all public corporations since the fi scal year 1990 (Alsharairi and Al-Abdullah 2008). Specifi cally, this study examines to what extent do the industrial publicly listed companies in Jordan disclose information about intangibles in their annual audited reports. Our investigation emphasizes the reporting companies compliance with IAS38 disclosures requirements. Therefore, the current research addresses two main questions: (1) to what extent do the Jordanian public listed industries disclose information about IA? and (2) what factors are associated with the disclosure of IA? 386R. Al-Hamadeen et al. prochazdvse.cz 36.2Literature Review Several studies in the different fi elds of accounting and other business disciplines investigate the reporting patterns and the infl uencing factors of intangibles dis- closure, mostly in North American and European samples (see for example, Choi et al. 2000; Stolowy et al. 2001; Rowbottom 2002; Busacca and Maccarrone 2007; Dahmash et al. 2009; Sahut et al. 2011; Jerman 2013; Kumar 2013; Devalle and Rizzato 2014; Frey and Oehler 2014). However, we know little about the special corporate disclosure practices (such as those of intangibles) within the emerging countries (Leventis and Weetman 2004). A limited number of studies in the developing countries seem to focus on intellectual capital (IC) in addition to intangibles disclosure (see, for example, Abeysekera 2007; Sharabati et al. 2010; Kang and Gray 2011; Al-Hamadeen and Suwaidan 2014). Among the main concerns of the researchers in the area of IA is valuation. Choi et al. (2000) present empirical evidence that reveals that the reported fi nancial assets are positively valued by the fi nancial market and that the markets valuation of a dollar of IA is lower than its valuation of other reported assets. Farther, Stolowy et al. (2001) and Busacca and Maccarrone (2007) question the quality of intangible-related information under IFRS since that there is a diffi culty in the international harmonization process of accounting for intangibles since there is a link between relevance and Anglo-American accounting philosophy as well as between reliability and ContinentalEuropean accounting. In UK, Striukova et al. (2008) fi nd that the reporting companies use a wide range of different corporate intellectual capital information reported for communication, richer than the fi rms annual reports themselves. Another European evidence obtained by Sahut et al. (2011) indicates that the capitalized goodwill, when dis- closed by local GAAP, is more relevant than goodwill under IFRS, according to the perceptions of the European investors. Thus, European companies balance sheets provide more value-relevant information for shareholders on the identifi able IA. In an attempt to investigate the Eastern Europe case, Jerman (2013) explores the importance of intangibles reported in the annual reports of the Slovenian companies and their impact on the economy. Jerman (2013) concludes that intangibles are more important in the traditionally advanced economies. Interestingly, voluntary disclosures are customary by the Slovenian companies, given the negligible amount of disclosures reported. In another study, Kumar (2013) fi nds that larger fi rms, more dispersed in their ownership, lower in leverage and those from more individualistic countries disclose more voluntary information about intangibles. In a US-based research, Whitehouse (2013) attempts to set criteria for measuring goodwill levels and impairments among companies and sectors. The results indicate that 10.5% of the companies with a reported goodwill in 2012 have actually recorded impairment. In addition, companies in the industrial sector, health care and information tech- nology accounted for 67% of the total goodwill write-down in 2012. In a Jordanian study, Al-Hamadeen and Suwaidan (2014) investigate the intel- lectual capital (IC) voluntary disclosures reported by the Jordanian industrial PLCs. 36Intangibles Disclosure: Evidence from Annual Reports 387 prochazdvse.cz Based on the previous literature (namely, Edvinsson and Malone 1997; and Johnson 1999), the researchers use a research index on 60 industrial companies listed on Amman Stock Exchange (ASE) for the year 2012. The results indicate that information about the intellectual capital is extensively disclosed by the large industrial companies in Jordan. Up to 59% of the hypothesized IC disclosure items are reportedly found in the annual reports of the study sample. Al-Hamadeen and Suwaidans (2014) evidence reveals that human capital is the most disclosed aspect among all three investigated components of IC (i.e. human, internal and external capital). Moreover, size and ownership concentration have the highest explanatory power since the larger companies with greater concentration in their ownership tend to disclose more information about their intellectual capital. It could be argued that an increasing trend in disclosure of IA in annual reports is anticipated in the foreseeable future. Moreover, it could be noticed how rare research endeavors are on the developing countries, especially those of MENA region. Therefore, this study aims at investigating the extant practices of intangi- bles disclosure in Jordan. In the same vein, previous literature provides several implications for the current research (namely, Kang and Gray 2011; Kumar 2013; Whitehouse 2013; Al-Hamadeen and Suwaidan 2014). These implications include considering infl uential factors on intangibles disclosure (e.g. size of market capi- talization, sub-sector and age of the reporting company), as well as considering the methodological implications (i.e. components of the research index applied in the current study). 36.3Research Design, Sample and Data According to the reviewed literature, we consider the hypothesized relationships between the level of IA disclosure and three suggested factors: size, age and sub-sector of the reporting companies. Hence, we posit the following null hypotheses: H01 : There is no signifi cant positive relationship between the age of the company and the level of intangible assets disclosure. H02 : There is no signifi cant positive relationship between the market capitalization of the company and the level of intangible assets disclosure. H03 : There is no signifi cant relationship between the sub-sector of the company and the disclosure of intangible assets. The current study adopts an analytical methodology for the annual reports of the study sample in order to achieve the research objectives. The research data are collected by a research index informed by prior studies and based on the standards requirements (namely, KPMG Checklist 2013 and IAS38). Therefore, content analysis is used to gather information related to IA and their related disclosures in the fi rms annual reports. The research index employed in this study consists of 25 388R. Al-Hamadeen et al. prochazdvse.cz items related to the general characteristics of the reporting companies and the technical disclosures related to intangibles. The sample of the study includes the annual reports of all the 69 industrial companies that are listed on ASE and active during 2012. Two-stage reliability check of the developed research index is performed. First, the content of the research index is reviewed by two referees, who are academics and specialized in fi nancial accounting, and second by performing stability tests (intra-rater) and reproducibility test. Therefore, Cohens kappa coeffi cient is used to test the reli- ability of the research index and the coeffi cient result is (K = 92%), which confi rms the validity of the research index. 36.4Results and Discussion Table 36.1 presents the results of the descriptive analysis related to the character- istics of the reporting companies. In fact, the industrial sector in Jordan includes 28.4% of the total companies listed on ASE during the year 2012. The industrial sector consists of 8 sub-sectors, as presented in Table 36.1, noting that Mining and Extraction sub-sector makes the highest weight in the industrial sector with a number offi rms representing (23.2%), followed by Others (18.8%) and Food and Beverages sub-sectors (15.9%). A number of prior studies argue that the companys age is among the most important factors that affect the level of disclosure (Delaney and Huselid 1996; Xianbing and Anbumozhi 2009). In this study, age is divided into six different categories (see Table 36.1). The majority of the companies (26.1%) are located within the (110 years) age category, while companies aged between (1120 years) represent 17.4%, companies between the age of (2130 years) represent 17.4%, companies between the age (3140 years) represent 17.4%, and companies between the age (41-50 years) represent 7.2%, and only 14.5% of the investigated compa- nies have been actively operating in the market for more than 50 years. Further, size is expected to impact the level of intangibles disclosure. Larger fi rms usually have adequate resources to collect, process and communicate an extensive amount of information at a minimal cost (Firth 1979). In this study, size is measured by the fi rms market capitalization. We divide the research sample in terms of size into three categories: small, medium and large, as presented in Table 36.1. The results presented in this section are related to the technical disclosure of the IA. These results are obtained from the quantitative information disclosed in the main body of the fi nancial statements of the Jordanian industrial companies. The information presented in Table 36.2 reveals that the disclosure items vary in terms of being reported by the sampled companies as their existence ranges between 5.8 and 17.4% in the overall industrial sector. Regarding the disclosure of the gross carrying amount, the detailed results indicate that there are unsystem- atic approaches of disclosure. Two companies disclose the gross carrying amount 36Intangibles Disclosure: Evidence from Annual Reports 389 prochazdvse.cz of goodwill and other IA, while only one company discloses the gross carrying amount of patents and other IA. In the same vein, four companies only disclose the gross carrying amount of goodwill, whereas fi ve companies disclose the gross carrying amount of other intangibles. The least disclosed item is the one related to the basis of determining the indefi nite/defi nite life of intangible asset which is reported only by 5.8% of the sample (4 companies out of 69). Table 36.1 Information of the reporting companies Sector/sub-sector of the reporting company (Industrial)Frequency(%) Pharmaceuticals and medical68.7 Chemicals1014.5 Paper and cardboard34.3 Food and beverage1115.9 Tobacco and cigarettes22.9 Mining and extraction industries1623.2 Engineering and construction811.6 Others1318.8 Age of the company (in years) From 01 to 101826.1 From 10 to 201217.4 From 20 to 301217.4 From 30 to 401217.4 From 40 to 5057.2 More than 501014.5 Size of the market capital Small (1)6492.8 Medium (2)22.9 Large (3)34.3 Source Own calculations based on data from Amman Stock Exchange (ASE) Table 36.2 Technical disclosure of intangible assets Disclosed intangible item(s)Frequency(%) Useful life or amortization rate913.0 Amortization method913.0 Gross carrying amount1217.4 Accumulated amortization and impairment losses1115.9 Intangibles amortization is disclosed within line items in the income statement 68.7 Information disclosed about reconciliation of the carrying amount of goodwill at the beginning and the end of the period 913.0 Basis for determining that the intangibles have an indefi nite life45.8 Disclosure of intangibles in general1217.4 Source Own calculations based on data from annual reports of the targeted companies 390R. Al-Hamadeen et al. prochazdvse.cz Table 36.3 illustrates the detailed factors tested under the reconciliation item. According to the disclosure requirements of IAS 8, IA are normally affected by severaltransactionsincluding:Additions(frombusinesscombinations), Revaluations, Impairment and Amortization. The effect of these transactions is usually mentioned in the reconciliation of the carrying amount of intangibles at the beginning and the end of the period (IAS38). Table 36.3 presents the transactions that affect intangibles value as disclosed by the investigated companies. The fi ndings show that the industrial companies provide information about the intangibles additions due to business combinations or in buying new intangibles. In this regard, 7 companies out of the 69 disclose additions of intangibles which represent the highest percentage (10.1%). The results of the disclosure of the useful life or amortization rate item indicate that 13.0% (9 cases) disclose related infor- mation, two of them disclose the useful life or amortization rate of goodwill, while one company disclose the useful life or amortization rate of patents and other IA. The remaining 6 companies disclose information about the useful life or amorti- zation in general. Furthermore, the results indicate that limited information is dis- closed about the amortization methods of different intangibles. In terms of the accumulated amortization and impairment losses, only 15.9% (11 cases) of the targeted companies disclosed information in these issues. Table 36.4 presents the descriptive results related to the non-technical disclo- sures of intangibles (items C.1C.6 in the research index). The results show that the information disclosed about the amount of research and development expenditure recognized as an expense in the current year has the highest percentage of com- panies (26.1%). Two of the companies disclose about IA developed internally, and two companies disclose information about individually material IA (description and carrying