DETERMINANTS OF INTANGIBLE ASSETS DISCLOSURE IN ANNUAL REPORTS IN NIGERIA
ABSTRACT
 The broad objective ofthis study is to investigate the determinants of intangible assets disclosure in Nigeria annual reports by firms listed in Nigeria stock exchange while the specifics are to established the individual impact of profitability, leverage, auditor type and company size on intangible assets disclosures.
The data for this study were gathered from annual reports of twenty (20) firms across the various sectors listed in the Nigeria stock exchange for a period of five years. The data were analyse with the OLS regression technique with aid of Eview7.
The findings from the study revealed that profitability and size had a positive and significant relationship with intangible assets disclosure. Leverage exhibits a negative relationship with intangible assets while auditor type also revealed a negative relationship with intangible assets disclosure in annual reports.
The study therefore recommend that less attention should be paid to firm specific characteristics by experts while more companies should be involved in future research.
TABLE OF CONTENT
CHAPTER ONE
INTRODUCTION
1.1    Background of the Study    -    -    -    -    -    -    -    
1.2     Statement of the Research Problem    -    -    -    -    
1.3     Research Questions    -    -    -    -    -    -    -    
1.4     Objectives of the Study    -    -    -    -    -    -    
1.5     Research Hypotheses    -    -    -    -    -    -    -    
1.6     Scope of the Study    -    -    -    -    -    -    -    
1.7     Significance of the Study    -    -    -    -    -    -
1.8     Limitations of the Study    -    -    -    -    -    
1.9     Definition of Terms    -    -    -    -    -    -
CHAPTER TWO
REVIEW OF LITERATURE
2.1.    Introduction    -    -    -    -    -    -    -    -    -    
2.2    Concept of Intangible Assets Disclosure    -    -    -    -        
2.2.1     Profitability    -    -    -    -    -    -    -    -        
2.2.2    Leverage    -    -    -    -    -    -    -    
2.2.3    Size of the Company    -    -    -    -    -    -    -    -    
Ownership concentration     -    -    -    -    -        
2.3    Theoretical Framework    -    -    -    -    -
2.3.1     Agency Theory    -    -    -    -    -    -    -    
2.3.2     Stakeholder Theory    -    -    -    -    -    -    -
2.3.3     Signalling Theory    -    -    -    -    -    -    -    -
2.3.4     Legitimacy Theory    -    -    -    -    -    -    -    
Review of Empirical Studies    -    -    -    -    -    -        
CHAPTER THREE
METHODOLOGY
3.1     Introduction    -    -    -    -    -    -    -    -    -
3.2.     Research Design    -    -    -    -    -        
3.3    Population and Sample Selection    -    -    -    
3.4.     Method of Data Collection    -    -    -    -    -    
3.5.     Data Analysis Techniques    -    -    -    -    -    -    
3.6     Model Specification     -    -    -    -    -    -    -
3.7    Measurement of variables     -    -    -    -        
CHAPTER FOUR
DATA PRESENTATION, ANALYSES AND INTERPRETATION OF RESULTS
4.1    Introduction    -    -    -    -    -    -    -    -
4.2         Descriptive Statistics    -    -    -    -    -    -        
4.2.2     Empirical Results on the Panel Analysis    -    -    -    -    
4.2.3    Regression Result    -    -    -    -    -    -    -    -
4.2.4    Diagnostic Tests    -    -    -    -    -    -    -    
4.3    Discussion of Findings    -    -    -    -    -
CHAPTER FIVE
SUMMARYOF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1     Introduction    -    -    -    -    -    -    -    -        
5.2    Summary of Findings    -    -    -    -    -    -    -    -    
5.3    Conclusion    -    -    -    -        
5.4    Recommendations    -    -    -    -    -    -    
Bibliography    -    -    -    -    -    -    -    -
Appendix    -    -    -    -    -    -    -        
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
In the beginning of the 21st century, the role of intangible as value and growth creators is accepted among economists, investors and managers (Pandya & Jain, 2015). Since then, intangible assets disclosure has continued to receive increasing attention among companies around the World including Nigerian companies.  For companies to be competitive in the global market, a progressively developing African country like Nigeria has to effectively move away from production of labour-intensive goods to a knowledge-driven economy that focuses more on utilizing intangible assets, human knowledge and skills, rather than on production of labour-intensive goods (Taliyang, Latif& Mustafa, 2011).  Traditionally, companies used to compete with each other on the basis of the strength of their physical assets like raw materials, plant and machinery, equipment, inventories etc. However, in the present business environment, companies endeavour to create an edge over its competitors through their investment in intangible assets (Irandegani&Bameri, 2014). Intangible assets like intellectual capital, knowledge relationships, trademarks, brands, patents, technological know-how, corporate cultures, research and development expenditures, worldwide networks, global customer base, satisfied customers, internet and e-commerce, organisational structures, skilled employees etcare becoming basic drivers for achieving competitive strength.
Lee (2010) asserted that the growth of the service sector and information technology related businesses along with the dramatic increase in the number and size of mergers and acquisitions has made accounting for intangible assets very significant. Given the increasing importance of intangible assets in driving corporate values, it can however be argued that corporations should nonetheless communicate relevant and useful information on intangible assets to their stakeholders. Dutz, Kannebley, Scarpelli and Sharma (2012) opined that a common finding in the literature is the overwhelming importance attached to intangibles and any attempt to ignore them in financial reporting will lead to distortions and incomplete performance measurement.  Financial statements are the primary means of communication between the company and its shareholders. The desire of accounting as a profession is to provide an adequate framework, which enable the preparation of high quality financial report. In preparing these financial statements, assets and liabilities are reported at their net book values to determine the financial performance and position of the firm and ultimately, the net worth of the business. However, one vital aspect of these financial reporting which is unduly neglected in the statement of financial position is the reporting of intangible assets (Krstic&Dordevic, 2010).  Branswijk and Everaet, (2012) stated that as companies became more complex and expand their business activities, the gap between market value and book value increased, a trend that gained the attention of International Accounting Standard Board to develop 1AS38 to capture how intangible assets be measured and reported in the annual reports. So much of the intangible assets cannot be recognized on the statement of financial position. Despite the long list of assets that might be categorized as intangibles, it is argued that not all these assets have allowable recognition on the financial statement. According to Collings (2011), IAS38 prohibits the group of intangibles deemed as internally generated from being recognized on the statement of financial position. He further opines that customer lists, brands, mastheads and publishing titles are examples of intangibles that should not be recognized on the financial statement.
1.2 Statement of the Research Problem
    It can be argued that traditional (accounting-based) information systems are not able to provide adequate information about corporate intangible assets and their economic impact. This causes abnormally high volatility of stock prices, which results in undue losses to investors and misallocation of resources in capital markets. As a consequence, intangible-intensive enterprises are confronted with excessive cost of capital, hindering their investment and growth. Bearing in mind that the traditional model of financial reporting is not able to provide relevant information about the company’s intangible assets and in the past two decades there have been numerous efforts to overcome these limitations. This leaves an information gap that is not satisfying to the stakeholders.  In addition, with the lack of information about the largest part of corporate assets, the risk managerial decision making increases. Because corporate outsiders have even less access to such information, the resulting information imbalance can lead to excessive trading gains to corporate insiders, destroying investors' confidence. This creates a need for assessing the intangible assets disclosure of the corporate organizations.
Research Questions
The following problems were addressed in this study
What is the effect of profitability on intangible assets disclosure?
What is the impact of leverage on intangible assets disclosure?
What is the relationship between auditor type and intangible assets disclosure?
What is impact of company size on intangible assets disclosure?
1.4 Objectives of the Study
The broad objective of the study is to examine the determinants of intangible assets disclosure in annual reports of Nigerian quoted companies. Specifically, the objectives of this study include to:
determine the effect of profitability on intangible assets disclosure.
investigate the impact of leverage on the intangible assets disclosure.
examine the relationship between auditor type and intangible assets disclosure.
ascertain the relationship between company size and intangible assets disclosure.
1.5 Research Hypotheses
For the purpose of this study, only the null hypotheses will be stated and formulated. The following hypotheses seek to answer the research questions stated above.
Profitability has no effect on intangible assets disclosure
Leverage has no impact on intangible assets disclosure
There is no relationship between auditor type and intangible assets disclosure.
There is no relationship between company size and intangible assets disclosure.
1.6 Scope of the Study
The study focuses on determinants of intangible assets disclosure in corporate reporting in Nigerian companies. The study population covers all the quoted companies on the floor of Nigerian Stock Exchange (NSE). The study was limited to twenty (20) companies listed in the Nigerian Stock Exchange (NSE) the study period covers five years (2011-2015)
1.7 Significance of the Study
    This study is expected to provide useful insight into improving financial statement quality. The study contributes to the accounting literature as it provides additional empirical evidence on the determinants of intangible assets disclosure. The study also will be useful to stakeholders in Nigerian Stock Exchange (NSE) as it provides evidence on the determinants of intangible assets disclosure and the reform instituted by them in formulating the laws of intangible assets disclosure of listed companies in Nigeria.
1.8 Limitations of the Study
    It is important to state certain factors limiting this research work. Some of such factors are as follows. First only listed companies have been included in the study and the quality of information reported by unlisted companies represent a limitation of the study, restricting the study of  quality reporting to publicly quoted firms excluding a significant and most efficient institutional arrangement for undertaking productive activities. Secondly, like many empirical studies that rely on disclosed proxy data, proxy disclosures may not represent all aspects of intangible assets determinants.
1.9 Definition of Terms
Accounting: Is the process of identifying, measuring and communicating economic information to permit informed judgment and decisions by the users of the information.
Intangible Assets:  are assets that are latent, non monetary and do not have physical nature. The International Accounting Standard, IAS38 defines intangible assets as assets that are identifiable, non-monetary assets, and without physical substance.
Assets Disclosure: is to make public official’s assets and business activities transparent to the public  
Financial Report: Is the end product of accounting transactions or economic events aimed at providing qualitative and quantitative financial information to evaluate and predict the performance of the organization to permit informed judgment and decision making.
Corporate performance: is a composite assessment of how well an organization executes on its most important parameters, typically financial, market and shareholder performance.
Potentialinvestors: They usually observe that trend of crucial variables in the financial statements. Such variable include profits, dividend, turnover, earnings per share and market per share.
CorporateTransparency: This is a set of information privacy, and business policies to improve corporate decision making and operations openness to employees, stakeholders, shareholders and the general public.