On 1 October, entre as 11h00 e as 12h00, tem lugar uma sessão dos ISEG Research Seminars. O orador convidado será Anna Bedford da University of Technology Sydney. Esta sessão decorre na Sala Delta (Edifício Quelhas, 3º piso).
Title: Credibility of voluntary disclosure on intangible assets
Abstract: Most intangible assets (IA) are not recognised under accounting standards, heightening the reliance on voluntary disclosure to inform investors. Yet, agency problems and proprietary costs raise concerns about the credibility and effectiveness of the current voluntary IA disclosure regime. This paper examines whether voluntary IA disclosure aligns with the underlying economic value of IA, and whether deviations from this value have economic consequences in the capital and managerial labour markets. The paper exploits the mergers and acquisitions (M&A) setting, in which fair valuations of the target’s IA become observable. The paper finds a positive association between the extent of voluntary IA disclosure and IA value; however, this association is constrained by the presence of proprietary costs. Further results indicate that less credible firms experience adverse capital market outcomes consistent with a deteriorated information environment. Relative to underlying IA value, under-disclosing target managers are more likely to secure acquirer board seats following the acquisition, while over-disclosing managers experience reputational decline in the broader executive labour market.a