Do the Romanian and Spanish Accounting Environments Meet the Challenges Concerning the Acknowledgement of Intangible Elements?

Abstract

Research motivation -Our aim is to identify the extent to which companies quoted in the Romanian and Spanish stock exchanges, that must apply the International Financial Reporting Standards truly comply with the provisions of these norms in presenting, in the financial statements, the information on intangible assets. We have also studied a series of indicators of intangible capital, in order to identify the extent to which the Romanian and Spanish accounting environments meet the challenges concerning the acknowledgement of intangible elements.Methodology -In order to identify the policies used by companies in the reporting of intangible assets and to determine the extent to which companies forced to apply the IAS/IFRS comply with the IAS 38 provisions, we have analyzed the consolidated financial statements, drawn according to IFRS by 19 Romanian companies quoted in the Bucharest Stock Exchange and 27 Spanish companies quoted in the Madrid Stock Exchange, components of the IBEX 35 index. We have determined the weight of the intangible assets in the fixed assets and have computed the mean degree of dissemination of the information on intangible assets based on the scores obtained by each company to a set of questions, designed in the spirit of the IAS 38 provisions.Main findings -To the 8 questions in the set, created in the spirit of the IAS 38 provisions, the Iberian companies generally give more analytical answers. Also, they present significant weights of the intangible assets into the fixed assets. Besides the financial reporting of intangible assets, we have been concerned with analyzing non-financial information referring to human, relational, and structural capital. It is worth mentioning that, unlike the Romanian companies, the Spanish companies present in their annual reports a large amount of data and information on intangible capital.

The Quality of Disclosure under IAS 38 in Financial Statements of Entities Listed on PSE

“…2 Over the course of writing this article, I found out that my initial questions were consistent with the research questions of Fadur et al (2013). Some may consider the presented paper as a mere replication of the above-mentioned research within the Czech conditions.…”

“…In order to achieve the above stated goal, I have built a set of four questions. It should be noted that that these questions 2 (see below) originally came from the article by Fadur et al (2013).…”

“…His study showed that firms do not attach enough importance to the disclosure of detailed information on intangible assets in their annual financial reports. Fadur et al (2013) identified the extent to which companies listed on the Bucharest Stock Exchange and the Madrid Stock Exchange comply with the disclosure requirements under IAS 38. There were analysed consolidated financial statements under IFRS.…”