Effect of value relevance of intangible assets on enterprise value: The case of Turkey

In this study, the value relevance of the intangible assets reported and unreported (intellectual capital) in the financial position statements of the companies listed in Borsa Istanbul on the enterprise value was examined. The scope of this study included 53 firms regularly traded at BIS 100 between the years of 2009 and 2016, except from financial institutions and the companies whose equity book value were not negative. Models developed by adding respectively intangible assets reported and unreported in the financial statements of the so-called firms to Ohlson (1995)'s Price Model were tested by panel data analysis. As a result of the analyzes made, it was determined that (1) accounting information about the equity book value and net earnings obtained from the financial statements of the firms has a meaningful relationship with the explanation power of the market values at the end of three months from the reporting date of the financial reports of the firms. (2) When compared with the value relevance of accounting information, there is an insignificant increase in the value relevance of intangible assets reported in the financial statements. In contrast, (3) a significant increase in value relevance was seen in the case of unreported intangible assets as well as those reported on financial statements In this respect, it is possible to achieve the result that IAS 38 Intangible Assets Standard should be amended to report the intangible assets at their actual values in the statements of financial position or the information on the unreported intangibles (intellectual capital) should be disclosed in the notes of financial reports of companies. Thus, it can be said that one of these amendments will contribute to the financial information users, especially investors, to obtain more useful information from the financial reports and to make the right decisions. Keywords: IAS 38, Value Relevance of Accounting Information, Ohlson Model, Intangible Assets, Intellectual Capital.