Introduction

Knowledge is considered the new and main source of value for organisations and it can be included in the concepts of either intellectual capital or intangible assets. ^{Oliveira, Rodrigues, and Craig (2006)} argue that intellectual capital comprises several components (knowledge of human resources, experience, information, and learning abilities). Therefore, knowledge is not a definition for intellectual capital.

However, there is no consensus in defining intellectual capital and intangible assets. In this regard, the ^{Meritum (2002)} establishes that intellectual capital is used to identify those organisational resources capable of generating future economic benefits, with no physical substance, and which can either be or not recognised in the financial statements. On the other hand, the concept of intangible assets used in accounting is subject to specific accounting requirements.

The present study analyses the factors that might explain the level of mandatory disclosure of intangible assets information in 37 Portuguese non-financial companies not listed in the regulated stock exchange market for the years 2010 and 2011.

In 2002, the European Commission issued Regulation (EC) 1606/2002 required the adoption of International Accounting Standards / International Reporting Standards (IAS/IFRS) by all companies with securities traded on European stock exchange regulated markets in the preparation of their consolidated financial statements. The same regulation also allowed member states to extend this requirement to other companies (such as non-listed companies).

Based on this regulation, in July 2009, the Portuguese Accounting Committee (CNC - Comissão de Normalização Contabilística) approved a new accounting frame of reference entitled Portuguese Accounting Standardization System (SNC - Sistema de Normalização Contabilística). Consistent with Regulation (EC) 1606/2002, the SNC’s accounting standards were based on IAS/IFRS, which superseded the previous Portuguese Accounting Plan (POC - Plano Oficial de Contabilidade), and were first adopted by Portuguese unlisted companies in January 2010.

The SNC’s accounting standard dealing with intangible assets is Accounting and Financial Reporting Standard (NCRF - Norma Contabilística de Relato Financeiro) 6 - Intangible Assets.

In 2015, the Decree-Law No. 98/2015 of June 2 transposed the Directive 2013/34/EU of the European Parliament and of the Council, of 26 June 2013, into the Portuguese jurisdiction, regarding the annual financial statements, the consolidated financial statements and related reports of certain types of companies. The Decree-Law No. 98/2015 was also intended to proceed with the unification and clarity of the SNC, approved by Decree-Law No. 158/2009. However, the disclosure requirements for intangible assets remained un-changed and similar to those required by IAS 38 (Intangible Assets) and IFRS 3 (Business Combinations) for those intangible assets acquired in a business combination (Appendix 1).

At an international level, studies are mainly focused on voluntary disclosure of intangible assets in different settings across the globe: Australia (^{Guthrie & Petty, 2000}; ^{Woodrock & Whitiny, 2009}); Germany (^{Goebel, 2015}) Ireland (^{Brennan, 2001}); Italy (^{Bozzolan, Favotto & Ricceri, 2003}); Saudi Arabia (^{Razak, Mohammad & Tobiagi, 2016}); South Africa (^{April, Boonia & Deglon, 2003}); Malaysia (^{Goh & Lim, 2004}); Sri Lanka (^{Abeysekera & Guthrie, 2005}); Spain (^{Oliveras, Gowthorp, Kasperskaya & Perramon, 2008}); New Zealand (^{Wong & Gardner, 2004}; ^{Whiting & Miller, 2008}; ^{De Silva, Stratford & Clark, 2014}) and even among different countries in the European Union (^{André, Dionysiou & Tsalavoutas, 2017}). However, even after the changes that have occurred in SNC between 2009 and 2015, there are still no research studies on the extent of mandatory disclosures based on IAS/IFRS adapted standards by unlisted companies during the transition period to a new accounting frame of reference based on IAS/IFRS.

The present study tries to fill this void by examining the level of compliance with the disclosure requirements of intangible assets by Portuguese non-finance unlisted companies specifically in the years 2010 and 2011. The choice of this time frame period is particularly interesting for two main reasons: a) first, it correspond to the two years of application of the new accounting frame of reference, with a different institutional logic regarding financial reporting. The previous accounting frame of reference, the Portuguese Accounting Plan (POC - Plano Oficial de Contabilidade) followed a code law institutional logic. However, since SNC is based on IAS/IFRS standards it is characterised by a common-law institutional logic. Moreover, since 2005, Portuguese listed companies have been adapting their financial reporting practices to a common-law institutional logic (^{Guerreiro et al. 2012}). However, Portuguese unlisted companies only performed this change in 2010. Thus, this research setting is interesting to assess the consequences of this change of financial reporting practices institutional logic and understand which companies are better prepared to comply with this new accounting frame of reference; b) second, it corresponds to a period of specific financial distress for Portuguese companies due to the deep consequences of the recent global financial crisis of 2007-2008 and the recent European sovereign debt crisis. Therefore, it is useful to analyse if companies used disclosures on intangible assets to manage their relations with relevant stakeholders in order to manage corporate reputation during a period of financial distress.

Prior literature reveals that intangible assets play an increasingly significant role in the decision-making process of several users of annual reports, essentially at the level of voluntary disclosure. But the present study shows that the level of mandatory disclosure of intangible assets is low in Portugal and basically restricted to information on useful lives, amortisation rates and methods, and gross carrying amounts and any accumulated amortization at the beginning and end of the reporting period. Moreover, larger companies basically disclose more information to reduce agency costs, manage political costs or even to mitigate non-compliance costs associated with organizational legitimacy purposes. Thus, this study may be fruitful to Portuguese regulatory entities to assist them in understanding and improving the real impact of accounting standards (^{Trombetta et al., 2012}). It will also be helpful to Portuguese companies to explore the areas of disclosure of intangible assets capable of providing more useful and relevant information to the users of annual reports.This paper includes, besides the introduction, a literature review and development of hypotheses for testing, followed by an explanation of the research method used, presentation and discussion of results, conclusions, study limitations and future research.

Literature review and development of hypotheses

Associated theories

Many studies on disclosure and its determinants concluded that there is not a single explanatory and comprehensive theory for corporate disclosure, but several theories. Each theory develops a different point of view regarding corporate disclosure, showing that in practice mandatory and voluntary disclosures are correlated (^{Alberti-Alhtaybat, Hutaibat & Al-Htaybat, 2012}; ^{Shiemann, Ritcher & Gunther, 2015}). The work developed by these authors had the purpose of mapping corporate explanatory disclosure theories to tackle both information asymmetry and adverse selection. The authors support the existence of various explanatory disclosure theories: free markets theory, market failure theory, environmental theory, regulatory theory, and manager incentives theory. The manager incentives theory is considered as the remaining part of the solution for disclosure problems and comprises the following theories: agency, political costs, legitimacy, capital needs, signalling and cost-benefit analysis, which will be addressed below. Agency, political costs, legitimacy and signalling theories form the background of the present study. The first and fourth theories are concerned with the maximisation of firm’s value, while company image or reputation is the focus of the second and third theories.

Agency theory deals with the relationship between shareholders and managers, who may act in their own interests at the expense of shareholders. Hence, the need to monitor management procedures might imply costs, referred as agency costs. Such costs increase as the ownership structure becomes more diffuse, because there is a greater probability of conflicts of interest between managers and owners (^{Fama & Jensen, 1983}). So, to reduce such agency costs, managers disclose more information (^{Cooke, 1989a}; ^{Raffournier, 1995}). Based on agency theory, which explains disclosure variations, many other authors have addressed this issue (Białek-Jaworska & Matusiewicz, 2015; ^{Biscotti & D’Amico, 2016}; ^{Cotter, Lokman & Najah, 2011}; ^{Dumay & Guthrie, 2017}; ^{Martins, 2012} ; ^{Oliveira, Rodrigues & Craig, 2011}; ^{Oliveira et al., 2006}; ^{Ousama, Fatima & Hafiz-Majdi, 2012}; ^{Wallace & Naser, 1995}; ^{Wallace, Naser & Mora, 1994}). Political costs theory sustains that companies face costs as a result of the attention they get from the government or other groups, in the form of increased taxes and fees, payments or boycotts to their products. Thus, financial, social and environmental disclosures are used to avoid those costs. This theory is commonly mentioned in research studies on disclosure level variation when corporate size is the explanatory variable (^{Alberti-Alhtaybat et al., 2012}; ^{Kang & Gray, 2011}; ^{Li, Pike & Haniffa, 2008}; ^{Lopes & Rodrigues, 2007}; ^{Macagnan, 2009}; ^{Oliveira et al., 2006}; ^{Tsalavoutas, 2011}; ^{Wallace et al., 1994}; ^{Williams, 2001}).

Legitimacy theory suggests that corporation’s activities are subject to certain rules and standards issued by regulatory authorities, and non-compliance implies either adjustment costs, political costs or asymmetric information costs. Therefore, companies are encouraged to disclose information to mitigate non-compliance costs (^{Silva, Rodrigues & Muñoz Dueñas, 2012}). This theory states that there is a social contract between business and society, and companies must implement actions in order to convey a true and fair view of their business. Through disclosure practices, companies seek to ensure that their operations and activities are perceived by stakeholders as legitimate, contributing to the general welfare of society (^{Cotter et al., 2011}; ^{Ousama et al., 2012}).

Signalling theory describes how asymmetric information problems can be reduced by managers through the disclosure of more information to relevant stakeholders. It is based on the assumption that companies with a low leverage ratio are motivated to give signals to the market about their financial structure and that is why they are expected to disclose more information voluntarily. In other words, to retain and attract new investors, companies signal their performance disclosing more information to increase investor confidence (^{Biscotti & D’Amico, 2016}; ^{Ousama et al., 2012}). However, this assumption has been questioned in a study whose results show a positive relationship among highly leveraged Australian firms (^{Whiting & Woodcock, 2011}). Other authors defend that firms have incentives to disclose bad news, in order to avoid litigation costs. In addition, markets respond more strongly to bad news than to good news (Białek-Jaworska & Matusiewicz, 2015; ^{Kothari, Shu & Wysocki, 2009}). Despite knowing the effects of corporate reporting explained by the previous four theories, due to the variety and breadth of different types of intangible assets, there is still a lack of an empirically proven relationship between extant theories and the results of studies on intangible assets (^{Castilla-Polo and Gallardo-Vásquez, 2016}).

Hypotheses development

Type of auditor

Previous empirical evidence has shown that auditing is a way of reducing agency costs and increase disclosure credibility (^{Ousama et al., 2012}). Larger auditing firms (the Big Four) stimulate their customers to often disclose more information, either in volume or extent, to preserve their reputation, develop their own skills and ensure customer’s loyalty. In some aspects they function as agency monitoring mechanisms. To safeguard their reputation they recommend extended levels of disclosure capable of reducing agency costs and potential litigation costs. In fact there is empirical evidence on the statistically significant relationship between the size of the auditing firm and the financial information disclosed (^{Boubaker et al., 2012}; ^{Depoers, 2000}; ^{Lopes & Rodrigues, 2007}; ^{Oliveira et al., 2006}; ^{Raffournier, 1995}; ^{Tsalavoutas, 2011}; ^{Wallace & Naser, 1995}; ^{Whiting & Woodcock, 2011}). However, there are studies that document the lack of a strong association (^{Morais & Fialho, 2008}; ^{Ousama et al., 2012}; ^{Wallace et al., 1994}). Thus, according to agency theory companies are expected to disclose more information if they are audited by one of the Big Four auditing firms.

H2: There is a positive association between the type of auditor and the level of compliance with intangible assets disclosure requirements.

Indebtedness

Agency theory is commonly used to explain the relationship between indebtedness and disclosure. According to several studies, highly indebted companies are more subject to higher risks, making it more urgent to reduce information asymmetry between shareholders and creditors, as they support higher agency costs (^{Kang & Gray, 2011}; ^{Macagnan, 2009}; ^{Orens et al., 2009}; ^{Tsalavoutas, 2011}; ^{Wallace & Naser, 1995}; ^{Williams, 2001}). To reduce those costs, companies are stimulated to greater information disclosure, which, in turn, allows the decrease of borrowing/financing costs. On the other hand, signaling theory explains that companies with a low debt ratio are encouraged to disclose more information about their financial structure as a signal of good performance, reputation, and financial health. However, there is empirical evidence showing a lack of association between financial disclosure and debt (^{Oliveira et al., 2006}; ^{Ousama et al., 2012}; ^{Raffournier, 1995}; ^{Wallace et al., 1994}; ^{Whiting & Woodcock, 2011}).

H3: There is an association between indebtedness and the level of compliance with intangible assets disclosure requirements.

Profitability

There is empirical evidence that supports the hypothesis of a positive relationship between disclosure and firm performance. According to agency theory, disclosure serves as a control mechanism and managers are encouraged to disclose information to maintain their position and compensations. In turn, according to signaling theory, more profitable companies may have the incentive to disclose information to distinguish themselves from other companies and avoid shares undervaluation. Some papers demonstrate this positive relation, namely, the higher the company performance, the greater the information disclosure (^{Debreceny & Rahman, 2005}; ^{Macagnan, 2009}; ^{Ousama et al., 2012}; ^{Raffournier, 1995}; ^{Wallace & Naser, 1995}). But this disclosure is limited to a certain profitability threshold level ^{Verrecchia (1983)}, and they do not disclose information below that limit. However, other studies found opposite relationships between disclosure and profitability (^{Boubaker et al., 2012}; ^{Cooke, 1989a}; ^{García-meca et al., 2005}; ^{Oliveira et al., 2006}).

H4: There is an association between profitability and the level of compliance with intangible assets disclosure requirements.

Type of industry

Signaling, legitimacy and political costs theories can explain the relationship between disclosure and the type of industry. According to these theories, companies which belong to the same industry are interested in the same level of disclosure to avoid competitive pressures or a negative market reaction. There is a relationship between disclosure and the activity sector or type of industry because disclosure in itself is a way to legitimise an entity. Previous studies results demonstrate that this variable behavior varies from a positive association (^{Boubaker et al., 2012}; ^{Branco et al., 2011}; ^{Kang & Gray, 2011}; ^{Macagnan, 2009}; ^{Oliveira et al., 2006}; ^{Ousama et al., 2012}; ^{Williams, 2001}) to any relationship between disclosure and the type of industry (^{Debreceny & Rahman, 2005}; ^{García-meca et al., 2005}; ^{Morariu, 2012}; ^{Wallace et al., 1994}). H5: There is an association between the type of industry and the level of compliance with intangible assets disclosure requirements.

Foreign activities or internationality

There is empirical evidence showing that company managers who work with external markets control a greater amount of information because of the higher complexity of operations and the major number of stakeholders, so the amount of information required is also superior, even if these companies do not have their shares listed on foreign markets. Therefore, and according to signaling theory, managers that are responsible for external activities are more interested in higher levels of disclosure, so that investors can recognise the presence of the company in international markets. This kind of disclosure is thus considered a “good sign” (^{Cooke, 1989b}; ^{Depoers, 2000}; ^{Raffournier, 1995}).

H6: There is a positive association between the level of internationality and the level of compliance with intangible assets disclosure requirements.

Research methodology

Methodological technique

In accordance with previous research (^{Branco et al., 2010}; ^{Ferreira, 2008}; ^{Kateb, 2012}; ^{Li et al., 2008}; ^{Martins, 2012}; ^{Oliveira et al., 2006}; ^{Orens et al., 2009}; ^{Striukova et al., 2008}), the methodological technique used to achieve the research objectives was the content analysis of financial statements and notes of the sampled companies for 2010 (transition year from POC to SNC) and 2011. Content analysis was done manually, as we searched for each intangible assets disclosure requirements.

Definition of intangible assets disclosure index

The content analysis used a codification instrument comprising 33 items of mandatory disclosure requirements. This list of disclosures was built through the analysis of disclosures recommended in paragraphs 117-123 of NCRF6. Regarding the disclosure requirements of intangible assets associated with business combination paragraphs 42, 47-49 of NCRF14 (Business Combinations) were also analysed. This codification instrument was used to perform the content analysis of the 2010 and 2011 financial statements and notes in order to construct a disclosure index. This disclosure index represents the dependent variable in our study and will assist all the research analysis.

Consistent with prior literature (^{Cooke, 1989a}, ^1989b; ^{Raffournier, 1995}; ^{Williams, 2001}), the disclosure index is a dichotomous variable that takes the value “1” if the company complies with the disclosure requirement and the value “0” otherwise. Judgmental procedures were adopted in the reading of all financial statements and notes, and cases of “Not Applicable” were not considered in our work. This allowed us to assess whether a particular item of disclosure was relevant to a particular company and it did not penalize nondisclosure (^{Cooke, 1992}).

The index of intangible assets disclosure (IIAD) for each company included in the sample is calculated as follows:

where, di = 0 (if the item i is not disclosed) or 1 (if the item i is disclosed) and di may vary between 1 and m = maximum number of company disclosed items (33).

Definition of the explanatory factors of disclosure

Consistent with our hypotheses, Table 2 summarises the independent or explanatory variables included in our econometric model, the proxies used and predicted signs for the relationship between each variable and the disclosure index.

Estimation model

The estimation model will test if the determinant factors influence the level of compliance with the intangible assets mandatory requirements provided by NCRF 6:

IIADit=αit+β1Sizeit+β2Type of auditorit+β3Indebtednessit+β4Profitabilityit+β5Type of industryit+β6Internationalityit+μit

where t=2010,2011 and j=1,2,...,n=37

Presentation and discussion of the results

Normality statistical analysis

Table 5 shows if the continuous dependent and independent variables follow a normal distribution.

Results from Table V show that both dependent and independent variables do not follow a normal distribution (p-value < 0.05).

Analysis of differences in means

Table 6 reports the results on the analysis of differences in means of both continuous dependent and independent variables between the two years of analysis: 2010 and 2011. Since these variables do not follow a normal distribution, we used nonparametric tests of Mann-Whitney U.

Results indicate that between the two years there are no statistically significant differences in all dependent and independent variables (p-value > 0.05). This suggests that potential endo-geneity problems are minimal.

Correlation analysis

The pairwise correlation coefficients among dependent and independent variables are presented in Table 7.

Results indicate that the disclosure index is positively and significantly correlated with size (p-value < 0.01) and with type of auditor (p-value < 0.05). These preliminary results seem to corroborate hypotheses H1 and H2. Results also indicate that the disclosure index is not correlated with profitability, internationality, indebtedness, and type of industry. Among independent variables the correlation coefficient is low, indicating that multicollinearity problems are minimal.

Regression analysis

To test our hypotheses, we used an OLS multiple regression analysis. As the dependent and independent variables do not follow a normal distribution, they were transformed into normal scores using Blom’s method, as recommended by Cooke (1988). Model assumptions were checked for outliers, autocorrelation, multicollinearity, heteroscedasticity and normality of residuals.

Table VIII shows the regression analysis results. The estimation model is statistically significant (F = 2.766; p-value < 0.05). The adjusted R2 of 0.15 indicates that the explanatory power of independent variables for the variation of intangible assets disclosure is 15%.

Discussion

Table VIII results show a statistically significant positive association between the level of intangible assets disclosure and company size (p-value < 0.01).

Therefore, hypothesis H1 is supported. Larger companies in our sample are more likely to comply with more intangible assets disclosure requirements. This result corroborates previous literature studies (^{Cooke, 1989a}, ^1989b, ¹⁹⁹²; ^{García-Meca et al., 2005}; ^{Goebel, 2015}; ^{Lopes & Rodrigues, 2007}; ^{Oliveira et al., 2006}). According to agency theory, larger firms tend to have higher agency costs, so they need to disclose more information to reduce those costs.

These results are also consistent with legitimacy theory, which argues that larger firms disclose more information to legitimate their activities and to manage stakeholder perceptions concerning image and reputation because they are more watched by the public. These results are also supported by political costs theory: the larger the size of the company, the higher the political costs, leading companies to disclose more information to reduce those costs. Results also indicate that the level of intangible assets disclosure is not statistically associated (p-value > 0.05) with the type of auditor, indebtedness, profitability, type of industry and internationality. The hypothesis H2 is rejected, meaning that the intangible assets disclosure index and the type of auditor are not associated. Other previous studies have also highlighted that lack of relationship (^{Ousama et al., 2012}; ^{Wallace et al., 1994}). One of the possible reasons for the present study results seems to be the fact that only 27 % of the companies in our sample are audited by one of the Big 4.

The hypothesis H3 of this study predicted a relationship between the disclosure index and indebtedness, which is not supported, as in other studies (^{García-meca et al., 2005}; ^{Lopes & Rodrigues, 2007}; ^{Oliveira et al., 2006}; ^{Ousama et al., 2012}; ^{Raffourmier, 1995}; ^{Wallace et al., 1994}; ^{Whiting & Woodcock, 2011}). Our findings seem to confirm that the most common funding mechanism of Portuguese companies (even those which are listed on the Portuguese stock exchange market) is bank loans at the expense of financing in the securities market. It is also known that banks access company information through annual reports or by direct contact between companies and bank managers, which provide additional information for a better perception of company risks. Therefore, a higher or lower indebtedness level seems not to influence disclosure, because there are other ways to obtain financial information beyond the traditional financial reporting mechanisms.

The hypothesis H4 is also rejected. The disclosure index and profitability are not associated. This result is consistent with some previous studies (^{Cooke, 1989a}; ^{García-meca, et al., 2005}; ^{Morais & Fialho, 2008}; ^{Oliveira et al., 2006}; ^{Wallace et al., 1994}) but also contradicts others (^{Debreceny & Rahman, 2005}; ^{Ousama et al., 2012}; ^{Raffournier, 1995}; ^{Wallace & Naser, 1995}). In line with ^{Verrecchia (1983)}, the lack of a possible relationship may be due to the existence of a threshold below which companies do not find incentives to disclose information. Thus, companies in our sample are likely to be below the profitability threshold.

The hypothesis H5 is not supported. The lack of a relationship between the disclosure index and the type of industry is sustained by previous literature (^{Debreceny & Rahman, 2005}; ^{García-meca, et al., 2005}; ^{Morais & Fialho, 2008}; ^{Morariu, 2012}; ^{Wallace et al., 1994}). However, some studies show the opposite (^{Lopes & Rodrigues, 2007}; ^{Oliveira et al., 2006}; ^{Raffournier, 1995}; ^{Wallace & Naser, 1995}). These results can be attributed to various factors, such as the type of industry (higher knowledge or technology intensive sectors represent only 30% of the sample).

Finally, the hypothesis H6 is not supported. The disclosure index is not associated with the company’s internationality. This finding is consistent with previous literature (^{Lopes & Rodrigues, 2007}; ^{Oliveira et al., 2006}).

Conclusion, limitations and future research

This study analyses the degree of compliance with intangible assets mandatory disclosure requirements outlined in paragraphs 177 to 123 of NCRF 6 (Intangible Assets) and paragraphs 42, 47-49 of NCRF14 (Business Combinations) regarding the intangible assets acquired in business combinations for the years 2010 (normative transition year) and 2011. Based on the content analysis of annual reports available on the websites of 37 companies included in the 500 largest Portuguese companies list published by Exame Magazine, 2010, we have calculated an index of intangible assets disclosure with 33 items of disclosure requirements. Results are expected to show an increase in disclosure level from 2010 to 2011. However, results do not confirm this expectation, since the index for intangible assets disclosure shows a mean of 30% in both years.

Hypothesis development was based on previous literature, which is diverse and varied, and on disclosure theories, such as agency, signaling, legitimacy and political costs theories. The results show that only size presents a statistically significant positive influence on intangible assets disclosure index and indicates that larger firms disclose more information on intangible assets to reduce agency costs, to avoid political costs associated with their public visibility, or even to mitigate non-compliance costs related to their organizational legitimacy agenda, and therefore manage stakeholders perceptions on their corporate image and reputation. All the other independent variables (type of auditor, profitability, type of industry, indebtedness and internationality) have no significant relationship with the disclosure index, that is, they are not explanatory factors for intangible assets disclosure.

As mentioned above, the mean value of intangible assets disclosure is a relatively low value (30%) since the target of this study is mandatory disclosure. This may be due to the fact that managers and accounting professionals from the sample companies are not yet fully endowed with the skills required by the new SNC standards, regarding intangible assets. In addition, managers and accounting professionals may not be aware of the recognition, accountability and disclosure of intangible assets benefits. Moreover, they may have a perception of disclosure as a source of competitive disadvantage and information costs.

The results of this study should be interpreted taking the following limitations into consideration. The first limitation is related to the small sample size, which is due to disclosure channel choices. We have selected companies which chose to disclose their annual reports on their websites, since it is easier to access information. The second limitation is related to the inherent subjectivity in the manual use of content analysis methodological technique that allowed the construction of a disclosure index from the reading and subsequent encoding of information. The two-year period under review is another limitation, as it does not allow the conjecture of disclosure increments. It will be necessary to carry out further long-term research, which was impossible in our study, since the study was based on data available for 2010 and 2011 exclusively. The fourth, and perhaps the most important limitation, is the selection of independent or explanatory variables and proxy variables used in this model, as the result of 15% for the Adjusted R2 shows that there may be other explanatory factors for intangible assets disclosure that are not included in this model.

This study is the first intrepid step to understand the phenomenon of mandatory disclosure of intangible assets in Portugal. The four limitations identified above should be regarded as future research opportunities on intangible assets disclosure.