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Conservatism of intellectual capital and relevance of earnings

Sofian, Saudah and Abdul Rasid, Siti Zaleha and Mehri, Mohammadghorban (2011) Conservatism of intellectual capital and relevance of earnings. International Journal of Business and Social Science, 2 (10). pp. 26-30. ISSN 2219-1933

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Official URL: http://dx.doi.org/10.30845/ijbss


This paper critically reviews the conservatism of accounting (by applying M/B value ratio) to pave the avenue of encouraging and the recognition of intellectual capital in financial reports of firms. This paper justifies this assessment in order to extend recognition and disclosure of intellectual capital to increase value relevance of earnings and also decrease the gap between market and book value. Review of this paper suggests that generally accepted accounting principle (GAAP), accounting standards and conservative of accounting prevent the recognition of intellectual capital. These standards should be improved to fulfill the stipulations of the new economy. Therefore , this paper proposes a model that evaluates the impact of conservatism of intellectual capital on relevance of earnings.

Item Type:Article
Uncontrolled Keywords:Conservatism of Intellectual Capital, Non-recognition of Intellectual Capital, Relevance of Earnings
Subjects:H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
ID Code:39805
Deposited By: Fazli Masari
Deposited On:21 Jul 2014 05:28
Last Modified:17 Mar 2019 04:02

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