.png){kind=icon}
.png){kind=icon}
Return
Intangible-intensive firms and performance reporting
.png){kind=icon}
OA
AI
A
M
K
DOI：10.1007/s11142-026-09966-z.png)
.png){kind=icon}
.png){kind=icon}
Share.png){kind=icon}
Save
Abstract
En 中文
US GAAP requires most intangible investments to be expensed as incurred, potentially distorting performance measurement. We examine whether voluntary non-GAAP disclosures mitigate these distortions for intangible-intensive firms. We find that intangible-intensive firms are more likely to report non-GAAP performance metrics when GAAP earnings lack relevance and that the resulting exclusions are of higher quality. Challenging the prevailing view that high-quality exclusions are limited to transitory items, we demonstrate that non-GAAP disclosures can also enhance performance measurement by excluding investment expenditures. Consistent with this mechanism, we find that intangible-intensive firms are more likely to exclude investment-related expenditures, that their non-GAAP disclosures are associated with higher returns to intangible investments, and that removing R&D enhances the predictive relevance of the performance metric. These effects are unique to firms that expense, rather than capitalize, intangible assets, highlighting the role of non-GAAP reporting in mitigating distortions arising from the mandatory expensing of intangible investments.
Keywords:
Intangible-intensive firms
Performance reporting
Earnings relevance
Innovation
Non-GAAP reporting
Investment efficiency
AI Summary
Key information extracted from the uploaded paper, including a brief overview, abstract, background, key highlights, visual analysis, and future outlook.
Journal
IF:
5.8
Papers:
1.0K
Citations:
6.4K
Organization
Cited Papers