Intellectual Capital Disclosure, Civil War, and Realized Earnings in Current Stock Return

This paper studies the relation between current intellectual capital disclosure (lCD), realized current earnings, and three years realized future earnings, in Sri Lanka ridden with a civil war. Examination of the top 30 listed firms in Colombo Stock Exchange from 1998 to 2003 shows that the current stock price includes current earnings information only and not ICD. Firms with higher price to book value reduce information content current stock price. Analyzing firms in 200I that enjoyed a period of truce in realized future earnings, it is evident that the current stock price includes lCD, and ICD facilitates the inclusion of future realized earnings information in current stock price. However, the current stock price does not include current realized earnings. Analyzing firms in the remaining years, when civil war affects future realized earnings, confirms the overall sample results except that current earnings evidence reduced information content in current stock price.