Disclosing intellectual capital in company annual reports: Evidence from Malaysia
Companies around the world are recognizing the importance of intellectual capital (IC) and its significant contribution towards adding higher value to its products or services. The objective of the study is to examine the IC disclosure practices of the top 20 profit-making public listed companies in Malaysia in their annual reports, both qualitatively and quantitatively. This paper adopts the definition of Karl Erik Sveiby which classified IC as internal capital, external capital and employee competence. A content analysis of 20 copies of 2001 annual reports was carried out. The study indicates that the incidences of voluntary disclosure of IC in company report are high qualitatively, but not quantitatively. This study will assist future researchers, the national accounting setting board and regulators to develop an appropriate accounting framework for those ICs which do not have accounting standards yet.