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Article: Accounting for Intellectual Capital: The Relationship between Profitability and Disclosure
- Article from:
- Journal of Applied Management and Entrepreneurship
- Article date:
- April 1, 2007
- Author:
CopyrightCopyright Nova Southeastern University, H. Wayne Huizenga School of Business and Entrepreneurship Apr 2007. Provided by ProQuest LLC. (Hide copyright information)
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Executive Summary
One hundred fifty high-technology companies were examined to determine if management's disclosure level of intangible assets was influenced by firm performance. Our research supported a statistically significant inverse relationship between the level of intellectual capital disclosure and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for both the fiscal years 2000 (r = -.1849, p ≤ .05) and 2004 (r = -.1515, p ≤ .05), and Net Income for the 2000 (r = -.2307, p ≤ .01) but not 2004 (r = -.0941, ns). Many start-up firms in the high-technology sector experience low to negative earnings, due in part to the treatment of intellectual ...