Huang Ching Choo
Accounting Research Institute and Faculty of Accountancy
Universiti Teknologi MARA, Shah Alam.

Noor Saatila Mohd Isa
Faculty of Accountancy, Universiti Teknologi MARA (Perak),Malaysia.

 

Discretionary disclosure is a channel frequently used by companies to communicate their intangible assets to their stakeholders. This paper examines the extent of discretionary disclosures of intangible assets of 100 randomly chosen Malaysian listed companies. The disclosures are analysed based on their locations (non-financial statements sections)and the association between the discretionary disclosures of intangible assets and noncapitalised intangible assets (measured in terms of market to book ratio).Out of the 12 intangible attributes under review, it is found that ‘product’ attribute is the highest disclosure, implying that products are the most frequently promoted. It is also found that the higher the noncapitalised intangible assets the greater the discretionary disclosure of intangible assets. Chairman’s statement appear to be the most popular vehicle used to communicate their intangible assets. As reporting of intangibles is discretionary, Malaysian companies may communicate their intangibles in the management commentary as a step forward in supporting ‘narrative reporting’ as recommended by the International Accounting Standards Board.

Keywords: discretionary disclosure, intangible assets, noncapitalised intangible assets, intellectual capital, Malaysia