| Summary: | 碩士 === 東海大學 === 會計學系 === 96 === Historical Cost Principle rules all accounting treatments, all the assets and liabilities have to follow it in the initial recognition. As the structure of economy changes over time, the principle is facing immediate challenges. In the modern high technology-based business environment, firms’ competitiveness will be largely decided by the amount of intellectual capital. Intellectual capital has two characteristics—invisible and difficult to evaluate, which will in turn affect the relevancy of firms’ financial statements, and thus mislead investors’ perception on firm’s true value. This also causes severe information asymmetry between firms and investors. According to Chung and Pruitt(1994) as well as Edvinsson and Malone(1997), there are three ways of presenting firms’ intellectual capital—comprehensive index, five-focus model and full model, I employ the three models to investigate how intellectual capital affect firm’s share repurchase decision.
The empirical results indicated that, intellectual capital and the proxy for information asymmetry(share turnover rates) have significantly negative association in the high intellectual capital group, and significantly positive association at the low intellectual capital group, It suggests that the higher the intellectual capital, the more serious the information asymmetry between firms and investors. Whereas the empirical results indicate that, the comprehensive index and the full model(except earning before tax) have significant association with firm’s share repurchase decision. The five-focus model shows that all focuses of intellectual capital have significant association with firms’ share repurchase decision except R&D focus, and management expense per employee( process focus). Put together, the results suggest that, as the importance of intellectual capital grows, effective evaluation and recognition should be developed to enhance the usefulness of financial statements.
|
|---|
