Value-relevance of expensed and capitalized intangibles - a French survey

Significant difference exists between the market value and book value of firms. It could be attributed to the fact that intangible assets are not reflected in the financial statements. Our resuls indicate a statistical association between the "capitalized goodwill" and the market-to-book ratio, but do not indicate any statistical link with the "expensed intangible-intensity" nor the "capitalized intangible-intensity". These results support and contradict, for a part, the explanation on the loss of value relevance of financioal information, which could be due to the non-recognized intangibles in financial statements. However, the differing French and American accounting treatments of intangible expenditures may explain why these expenses are not taken into account by french capital markets when estimating the value of companies.