The impact of intangibles on the value relevance of accounting information: Evidence from French companies

Bilal Kimouche, Abdenaser Rouabhi


Purpose: The paper aims to explore whether intangible items that recognised in financial statements are value-relevant to investors in the French context, and whether these items affect the value relevance of accounting information.

Design/methodology/approach: Empirical data were collected from a sample of French listed companies, over the nine-year period of 2005 to 2013. Starting of Ohlson’s (1995) model, the correlation analysis and the linear multiple regressions have been applied.

Findings: We find that intangibles and traditional accounting measures as a whole are value relevant. However, the amortization and impairment charges of intangibles and cash flows do not affect the market values of French companies, unlike other variables, which affect positively and substantially the market values. Also goodwill and book values are more associated with market values than intangible assets and earnings respectively. Finally, we find that intangibles have improved the value relevance of accounting information.

Practical implications: French legislators must give more interest for intangibles, in order to enrich the financial statements content and increasing the pertinence of accounting information. Auditors must give more attention for intangibles’ examination process, in order to certify the amounts related to intangibles in financial statements, and hence enrich their reliability, what provides adequacy guarantees for investors to use them in decision making.

Originality/value: The paper used recently available financial data, and proposed an improvement concerning the measure of incremental value relevance of intangibles items.


Relative value relevance, Incremental value relevance, Intangible items, Traditional accounting measures, Equity valuation, French listed companies

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Licencia de Creative Commons 

This work is licensed under a Creative Commons Attribution 4.0 International License

Intangible Capital, 2004-2019

Online ISSN: 1697-9818; Print ISSN: 2014-3214; DL: B-33375-2004

Publisher: OmniaScience