Voluntary Disclosure as described by Kand and Gray (Research Paper Sample)

WEEK 4 ASSIGNMENT: SELECTED FINANCIAL REPORTING AND DISCLOSURE ISSUES
ACCOUNTING FOR INTANGIBLES: REFERENCE TO THE WORK OF KAND AND GRAY
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INTRODUCTION
Voluntary disclosures are made by firms from own will outside the requirements of the set standards. For intangible assets, voluntary disclosure comes in as the firms recognise it value of analysts and investors.
Voluntary disclosure as described by Kand and Gray
Kand and Gray in their research study were interested in in examining the content of voluntary disclosures with respect to variety, extent and nature of intangible assets (IA). Their concentration was in the world 200 emerging market companies retrieved from Google and making use of 2002 financial statements. To achieved their objective as to the extent, variety and nature of disclosure, the made use of a value chain scorecard index, and content analysis as the main analysis method. The authors found that most of the companies engaged in IA disclosure. They alleged that most disclosure was at discovery and learning phase compared to implementation phase. They also found a contrary opinion to other studies, alleging that IA was reported in both qualitative and quantitative term instead of only qualitative. Further, the study indicated that size, and listing had no effect on extent of IA, but it was influenced by industry and standards.
Evaluation of the work of Kand and Gray
From the work of Kand and Gray, it is clear that IA plays an important role in preservation of a company corporate image. In fact, it has been used as a competitive industry strategy by most firms. Contrary to previous studies that have documented IA in qualitative terms, the authors bring out the quantitative term, which brings out the figures, and the extent to which IA contribute to corporate image. Therefore, it can be argued, that its incorporation improved a company level of capitalisation, since IA is recognised as a fixed assets in the firms statement of financial position.
It is also recognised that IA help capture corporate value, which was not recognised by most traditional financial reporting approaches. Therefore, making IA a significant development in financial reporting and disclosure. In addition, the authors recognise that IA is not physical and portrays future benefits. Therefore, this is an important facet for all firms recognising that the world is dynamic and filled with a lot of uncertainties, as it draws a picture of future benefits. IA is an important assets which has been reported to assist firms in times of crises. Therefore, the value of AI could be used by firms to acquire funds as it represent value.
The work of Kand and Gray having measured the extent of IA shed light to stability of firm. Therefore, firms with high IA would be having financial stability at this times of crises. Creditors are able to lend since they are able to have a better understanding of the firm. As it can be seen, IA was a development to safeguard firms from future uncertainties, as it portrays future benefits that could be derived by the firm. Therefore, gives a face of advantage to the firm in line with its financial needs. Thus, easy to convince investors and creditors.
The study having assessed the varieties of disclosure presents interest and development of a firm. The study