Qualitative characteristic of accounting information in reported values of goodwill and intangible assets (case study of the stock exchange of Iran)

Abstract

Reliability and relevance are the most important qualitative characteristic of accounting information. Goodwill and intangible assets are among reported items in financial statements under title of fixed assets, which they have different nature from other assets or other items of financial statements. In this research, we study reliability and relevance of reported values of goodwill and intangible assets in financial statements. If accounting items have two characteristic of relevance and reliability, they should be used in decision-making and must affect market value. To do this research, a sample including 88 member companies in Tehran Stock Exchange for 5 years (2005-2010) was selected and studied. Also, to study reliability and relevance of goodwill and intangible assets of reported items in financial statements, correlation of these two factors with market value of companies was studied by regression. After fulfillment of this research and confirmation of research Hypothesis, it was found that there is a positive and significant relation between reported values of intangible assets and goodwill as independent variable and qualitative characteristic of information as dependent variable. © IDOSI Publications, 2012.