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Voluntary disclosure of intangibles by capital-raising companies in Australia


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Abdul Halim, H 2011 , 'Voluntary disclosure of intangibles by capital-raising companies in Australia', PhD thesis, University of Tasmania.

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The decline in the usefulness of financial reports and the invisibility of intangibles
information in those reports has resulted in a growing effort to expand disclosure by
way of voluntary reporting to reduce the information asymmetry problem. Prior
studies on intangibles disclosure have successfully created awareness about the
importance of intangibles. However, the literature argues that clear results on the
determinants of differential disclosure are still scarce and that prior research does not
offer a strong theoretical basis to interpret the motives for disclosure. A direct
comparison of disclosure behaviour between firms with and without a capital-raising
motive provided by this study should provide an understanding of how these firms
signal their intangibles information.
Focusing on the top 200 Australian firms (based on market capitalisation) in 2006-
2008, this study aims to determine whether financing decisions provide a strong
incentive for firms to signal a greater variety of intangibles information, a higher
level of disclosure and more intense information to the capital market. Content
analysis of annual reports and prospectuses is carried out to determine the variety,
and extent of intangibles disclosure. Incorporating a range of impression
management tools in signalling information, this study also explores the concept of
intensity of disclosure, which reflects the strength of messages presented based on
their type, nature and also their presentation emphasis.
The findings, which support signalling theory, provide evidence that capital-raiser
firms disclose a greater variety of voluntary intangibles information with a higher
level of disclosure in their annual reports immediately prior to capital-raising
activity. Further, capital-raisers provide more intense and powerful signals compared
to their non-capital-raiser counterparts. In addition to annual reports, these firms also
utilise prospectuses to signal intangibles information during capital-raising activity.
However, the variety, extent and intensity of disclosure in prospectuses are
significantly lower compared to disclosure in annual reports. The overall findings
suggest that in order to compensate for the inadequacy of financial reports, capitalraiser
firms strive to make intangibles information visible in both annual reports and
prospectuses by not only making narrative disclosures but also by emphasising
intangibles using pictures and presentation emphasis by way of repetition. This is consistent with the motivation to provide intangibles information that investors will
not only recognise but that they will also retain and recall when making investment

Item Type: Thesis - PhD
Authors/Creators:Abdul Halim, H
Keywords: voluntary disclosure, intangibles, intensity of disclosure, capital-raising activity
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