Investigating the Effects of Disclosure of Non-Financial Intangible Information on Investors’ Judgment about Future Financial Performance of the Company

Document Type : Original Article


1 Ph.D. Candidate, Department of Accounting, Yasooj Branch, Islamic Azad University ,Yasooj ,Iran

2 Prof., Department of Accounting, Shiraz University, Shiraz, Iran.

3 MA, Department of Auditing, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

4 Associate Prof., Department of Accounting, Firozabad Branch, Islamic Azad University, Firozabad, Iran.


The present study aims to investigate the needs of users in connection with the information of intangible assets in current financial statements with an emphasis on the way of disclosing non-financial information. For this purpose, the effect of the two independent variables of causal links’ discussion and level of non-financial performance on the financial performance of the firm, as the dependent variable, has been studied. The research is applied in terms of its objective and it is a survey in terms of the research design. The research population includes PhD students of accounting in top-ranking universities of Iran. Statistical methods, including test ratio, single-sample t-test, independent t-test, and one-way and two-way variance analysis have been used to test hypotheses. The findings show that the disclosure of non-financial intangible information along with causal links does not affect the judgment of investors with a low or high level of knowledge. However, it should be noted that the recall of the performance in terms of non-financial criteria by investors, who have a causal link discussion, is higher than others.


Ajzen, I. (1977). “Intuitive Theories of Events and the Effects of Base-Rate Information on Prediction”. Journal of Personality and Social Psychology, 35: 303-314.
Arefmanesh, Z., & Rahmani, A. (2015). “modeling of intangible assets in accepted companies in Tehran stock exchange”. journal of management accounting 8(26): 81-112.
Arefmanesh, Z., Rahmani, A., Hejazi, R., & Amirshahi, M. (2016). “Investigating the value relevance of intangible assets in future earnings and future cash flow”. journal of knowledge of financial
accounting, 3(1): 1-20.
Arvidsson, S. (2011). “Disclosure of Non-financial Information in the Annual Report”. Journal of Intellectual Capital, 12(2): 277-300.
Bini, L., Simoni, L., Dainelli, F., & Giunta, F. (2018). “Business model and non-financial key performance indicator disclosure”. Journal of Business Models, 6(2): 5-9.
Buzinskiene, R. (2017). Determination of the Value of Intangible Assets in the Companies of Lithuania. Journal of Economics and Culture, 14(2): 55-68.‏
Cardinaels, E. (2008). “The interplay between cost accounting knowledge and presentation formats in cost-based decision-making”. Accounting, Organizations and Society, 33: 582–602.
Dan L. (2007). “Estimating activity costs: How the provision of accurate historical activity data from a biased cost system can improve individuals’ cost estimation accuracy”. Behavioral Research in Accounting, 19: 133–159.
Daniel, Z., & Anis, M. (2011). “The accounting treatment of intangibles – a critical review of the literature”. Accounting Forum, 35: 262-274. Developing accounting standards committee, audit organization (2008). Iranian accounting standards, standards number 3 & 17.
Dyczkowska, J. (2016). “Determinants and Quality of R&D Disclosures in Annual Reports of Biotechnological Companies”.Wrocla University of Economics. Online Retrieved from
Eccles, R.G., Herz, R.H., Keegan, E.M., & Phillips, D.M.H. (2001). “The Value Reporting: Moving Beyond the Earnings Game”. New York: John Wiley & Sons, New York, NY.
Einhorn, H.J., & Hogarth, R.M. (1986). “Judging probable cause”. Psychological Bulletin, 99: 3-19.
Elliot W.B., Hoge F.D., Kennedy J.J., & Ponk M. (2007). “Are M.B.A. students a good proxy for nonprofessional investors?”. The Accounting Review, 82(1): 139-168.
Fadur, C., & Mironius, M. (2013). “Study on the perception of accounting professionals concerning intangible assets and intangible capital”. Theoretical and Applied Economics, xx (4): 77-98. Financial Accounting Standards Board – FASB NN. (2001a). “Getting a grip on intangible assets-what they are, why they matter, and who should be managing them in your organization”. Harvard Management Update, 6(2): 6-8.
Ghanbari, M., Fathallahi, kh., Mozafari, S., & Ghorbanzadeh, M. (2017). “review the role of non-financial performance measures in disclosure in financial reporting”. new research in accounting and management, 21(10): 165-174.
Hales, J., Xi (Jason) K., & Venkataraman S. (2011). “Who believes the hype? An experimental examination of how language affects investor judgments”. Journal of Accounting Research, 40(1): 223-255. Heitger,
Hendricksen, E. F. (1982). Accounting Theory, Richard D, Irwin Homewood, Chapter 5: 102-15.
Khani, A., Sadeghi, M., & Mohammadi Holeh Soe, M. (2014). "effect of research and development costs on the stock return of active pharmaceutical companies in Tehran stock exchange”. Quarterly financial accounting, 6(21): 153-174.
Lev, B. (1999). “R&D and Capital Markets”. Journal of Applied Corporate Finance, 11: 21-35.
Mahmudi, M., Hadian, S. A., & Fallah Abed, T. (2015). “impact level of voluntary disclosure quality of financial and non-financial measures on earnings forecast”. journal of financial management guideline, 3(10): 105-128.
Mashaykhi, B., Beyrami, H., & Beyrami, H. (2014). “determining the value of intangible assets using artificial neural network”. journal of empirical accounting research, 4(14): 223-238.
Mazaheri, A. (2014). “accounting methods of intangible assets and challenges ahead”. Journal of accounting and auditing studies, 3(9): 113-125.
Mehrpoyafar, N. (2016). "investigating the effect of disclosure of research and development information on the cost of capital study of active companies in the chemical, pharmaceutical and food industries accepted in Tehran stock exchange” Master’s Thesis, The Mazandaran University, Retrieved from Iran dock.
Parvai, A., & Kordestani, Gh. (2018). “behavioral explanation of management decisions in the field of investment in intangible assets: reward hypothesis testing based on the experimental approach”. review of accounting and auditing, 25(4): 479-496.
Rahnama Roudposhti, F., Nikomaram, H., & Nonahal Nahr, A. A. (2012). “Evaluation of the impact of judgment and cognitive approaches in accounting explanation reports”. Review of accounting and auditing, 19(2): 47-72.
Sharma, K., & Kaur, M. (2019). “Intangible assets: reporting practices and hidden value measurement”. The research journal of social sciences, 10(1): 102-118.
Swanson, Z. (2018).” Internal intangible asset effect on firm valuation. University of Central Oklahoma, SSRN Database”, Available at: http: // /10 .2139/ssrn.3134117.
Tversky, A., & Kahneman, D. (1980). “Causal Schemas in Judgments under Uncertainty”. In M. Fishbein (Ed.). Progress in Social Psychology, New York, Lawrence Earlbaum Associates.
Upton, W.S., Jr. (2001). “Special Report: Business and Financial Reporting, Challenges from the New Economy”. Stamford, CT: FASB.
Valizadeh Larijani, A., & Hadidifard, A. (2016). “The relationship between financial and accounting factors with Profit dividend ratio in different stages of business life”. Journal of the stock exchange, 9(36): 75-96.
Winchel, J. (2008). “When do negative arguments increase the credibility of favorable analyst reports?” The University of Texas of Austin.
Yari, F. (2018). “Independent trust of non-financial information: securing trust”. Journal of auditor, 96: 26-28.
Yen, A. C. C. (2004). "Effects on investor judgements from expanded disclosures of nonfinancial intangibles information". The University of Texas-Austin. Online Retrieved from