PurposeThe purpose of this paper is to give an indication of the quantity of intellectual capital information in Japanese initial public offering (IPO) prospectuses from all stock exchange listings on the Japan Stock Exchange from 2003.Design/methodology/approachThe paper applied a disclosure index consisting of 78 items to quantify the amount of information regarding intellectual capital included in the IPO prospectuses of Japanese companies. An analysis of variance (ANOVA) was used to test, controlling for technological type of the company (high‐tech/low‐tech), and whether the extent of managerial ownership prior to the IPO, company age and company size influenced disclosure.FindingsFrom the analyses conclusions are derived for four hypotheses. The hypotheses “industry differences” (H1), “managerial ownership” (H2) and “company size” (H3) were found not to be significant factors explaining voluntary disclosure of information. The fourth factor, “company age” (H4), did, however, have a significant influence on the extent of disclosure for Japanese companies. Further testing of the Japanese companies regarding age showed a continuing trend.Originality/valueAlthough Japan has been strongly associated with the concept of the knowledge society, Japanese studies regarding intellectual capital have been very scarce. No studies, to the best of one's knowledge, have examined the specific disclosure of intellectual capital information included in Japanese IPO prospectuses.

This study is based on a survey of 324 financial analysts in Japan. The survey concerns analysts’ perceptions of intellectual capital (IC) information and its links to the evaluation of companies. The value relevance of and the access to IC‐related information reveals a large gap on many items. The analysis further shows that the lack of access to information hampers analysts’ use of IC in their evaluation of companies, particularly in their use of human capital measures. Attitudes towards more disclosure and standardisation are mainly driven by perceptions of what generates value in companies.

This article studies the effects of disclosure practices of Japanese IPO prospectuses on long-term stock performance and bid-ask spread, as a proxy for cost of capital, after a company is admitted to the stock exchange. A disclosure index methodology is applied to 120 IPO prospectuses from 2003. Intellectual capital information leads to significantly better long-term performance against a reference portfolio, and is thus important to the capital market. Further, superior disclosure of IC reduces bid-ask spread in the long-term, indicating that such disclosures are important in an IPO setting. Analysts and investors can attain higher long-term returns by understanding IC.

In this paper, we examine the association between bank-firm relationship and the use of derivatives, in term of decision to use or not to use derivatives as well as the extent of derivatives usage. We employ samples of non-financial companies listed in NIKKEI 225 index from 2005-2009. Using probit regression test, we find that bank-firm relationship and firm's size positively induce the decision to use derivatives. Meanwhile, using tobit regression test, the result indicate that bank-firm relationship, firm's size, leverage and dividend yield positively influence the magnitude of derivatives usage. The findings of our paper provide an empirical support for the hypothesis of Hakenes (2004) which argues that bank-firm relationship will benefit firm not only as the sources to grant loan, but also as delegated risk manager which could assist the firm in designing the appropriate hedging instrument.

The purpose of this paper is to explore, through M&As accounting policies, whether the Japanese adoption of IFRS is favorable for market participants. M&As are excellent prototypes for this study, because they have a substantial impact upon firms' financial statements. Additionally, Japanese M&A accounting standards still maintain the amortization period within twenty years, which is practical in creating a sharp contrast comparison with the impairment approach outlined by the IFRS 3 and SFAS141/142. We focus on how the recognition and implementation of three different measurement rules, such as the pooling-of-interests, purchase with the amortization of goodwill, and purchase with the immediate expensing of goodwill, influence investors' interpretations of earning numbers. First, we found that investors interpreted earning figures congruently despite the different accounting policies used. This phenomenon is consistent with the functional fixation hypothesis, which suggests that investors are bottom-line oriented. Second, we found that acquiring firms' who choose to expense entire goodwill values within the current fiscal year in order to alleviate investors' 3 concerns that the M&A would negatively impact bottom-line earnings, and we have found that this is done successfully, convincing investors to regard the immediate write-off as an irrelevant item to the firm's future earnings.

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