The Relation between Intangible Assets and Human Capital Reporting

Abstract

In current economic environment, firms consider human capital as one of their major sources of competitive advantage, and human capital reporting is a reporting system of firms providing information about employees’ knowledge, abilities, capabilities, and motivations. This study tests the relation between human capital reporting and intangible assets of firms, for the first time. The sample includes 131 firms listed in Tehran Stock Exchange during 2010 to 2014, and panel data regression method is used to process and test the hypotheses. The results show an inverse relationship between intangible assets and human capital reporting of firms listed in Tehran Stock Exchange. In other words, voluntary disclosure of financial and non-financial information about investment in human capital is an alternative to the identification of intangible assets in financial reporting. Accordingly, there is an inverse relationship between the mandatory disclosure of intangible assets and voluntary disclosure of human capital, meaning that voluntary disclosure plays an alternative role for mandatory disclosure.

Keywords

• intangible assets
• Human Capital
• Human Capital Reporting
• Tehran Stock Exchange