Intellectual Capital and IFRS3: a New Disclosure Opportunity

the aim of the paper is to analyze the distance, from an empirical perspective, between IC accounting and financial accounting in order to understand if a gap exists. Thus we will investigate how firms have applied IFRS3 by studying what the relevance of intangibles is, which intangible assets have been identified and valued and what goodwill is disclosed as in the purchase analyses. The empirical corpus consists of financial statements of Swedish and Italian listed firms. The methodology adopted is based on an empirical analysis of the purchase analyses supplied by the firms in the financial statements, referring to the first year mandatory adoption of IFRS3 (fiscal year 2006). The disclosed information is analyzed through both quantitative and qualitative analyses. The study finds that the analytical methods are still at a very first stage and consequently there is the trend to appreciate, at least in the financial statement, the majority of the IC as goodwill. The second finding is that even if they represent the minority part of the invisible value of the company, IFRS3 has really allowed for several intangible assets usually not disclosed in the financial statements such as customer relationships, contract portfolio, etc to be made visible. A third finding is the lack of explanations for this amount of goodwill. All in all, the paper highlights that, from an empirical perspective, both financial and IC accounting models are not able to adequately grasp IC “at work”