The trend and variation of intellectual capital disclosure at bank industries in Europe

Jou nal o Economics, Business, and Accoun ancy Ven u a Volume 16, No. 1, Ap il 2013, pages 105 – 118 Acc edi a ion No. 80/DIKTI/Kep/2012 105 THE TREND AND VARIATION OF INTELLECTUAL CAPITAL DISCLOSURE AT BANK INDUSTRIES IN EUROPE Asca yan Ra inda Bambang Agus P amuka Poppy Dian Indi a Kusuma Jende al Soedi man Uni e si y E-mail: [email p o ec ed] P o . d . HR. Boenjamin S ee 708, Pu woke o, 53122, Cen al Ja a, Indonesia ABSTRACT This s udy a emp s o iden i y end on he olume o In ellec ual Capi al (IC) disclosu e, and measu e a ia ion on he olume o IC disclosu e on he annual epo o banks ha ope a e in Eu ope. I uses pu posi e sampling me hod, consis ing o 6 banks wi h highes ank o ma ke alue in di e en coun- ies in Eu ope. The sample includes BNP Pa ibas (F ance), Banco San ande (Spain), In esa Sanpaolo (I aly), UBS (Swi ze land), Deu sche Bank (Ge many), and ING G oup (Ne he lands). Da a we e ana- lyzed using end leas squa e o iden i y he end o IC disclosu e. ANOVA es was employed o meas- u e he di e ences in he olume o IC disclosu e among banks. The esul o his s udy e ealed ha 5 o 6 banks show posi i e ends on he olume o IC disclosu e. The esul also showed ha he e a e a ia ions on ex e nal and human capi al disclosu e among 6 banks while o he wise o in e nal capi al disclosu e. The esul implied ha a global s anda d which is p inciple-based in na u e cause a ia ions in he IC disclosu es in Eu opean Banks. I sugges s ha he egula o should se s anda d o olun a y epo ing o minimize he a ia ion on he o ma and con en o he epo and o e en ually diminish asymme y in o ma ion be ween agen and p incipal. Key wo ds: In ellec ual Capi al, In e nal Capi al, Ex e nal Capi al, Human Capi al, Disclo- su e, Va ia ion, T end. TREN DAN VARIASI PENGUNGKAPAN MODAL INTELEKTUAL PADA INDUSTRI BANK DI EROPA ABSTRAK Peneli ian ini mengiden i ikasi en pada olume In ellec ual Capi al (IC) pengungkapan, dan menguku a iasi olume pengungkapan IC lapo an ahunan bank di E opa. Peneli ian ini menggunakan me ode pu posi e sampling, e di i a as 6 bank dengan pe ingka e inggi da i nilai pasa di be bagai nega a di E opa. Sampel e di i a as BNP Pa ibas (P ancis), Banco San ande (Spanyol), In esa Sanpaolo (I alia), UBS (Swiss), Deu sche Bank (Je man), dan ING G oup (Belanda). Analisis da a menggunakan end leas squa e un uk mengiden i ikasi en pengungkapan IC. Uji ANOVA digunakan un uk menguku pe - bedaan olume pengungkapan IC an a bank. Hasil peneli ian ini menunjukkan bahwa 5 da i 6 bank menunjukkan en posi i pada olume pengungkapan IC. Hasil peneli ian juga menunjukkan bahwa ada a iasi pada pengungkapan modal eks e nal dan manusia di an a a 6 bank, semen a a yang lain sebali- knya un uk pengungkapan kas in e nal. Hasilnya e si a bahwa s anda global yang me upakan p insip dasa alami menyebabkan a iasi pengungkapan IC di Bank E opa. Ini menunjukkan bahwa egula o ha us mene apkan s anda un uk pelapo an suka ela un uk meminimalkan a iasi pada o ma dan isi lapo an e sebu yang pada akhi nya akan mengu angi asime i in o masi an a a agen dan pelaku. Ka a Kunci: Modal In elek ual, Modal In e nal, Modal Eks e nal, Sumbe Daya Manusia, Pengungkapan, Va iasi, T en. ISSN 2087-3735 The T end and Va ia ion … (Asca yan Ra inda) 106 INTRODUCTION The disclosu e o in o ma ion conce ning he in ellec ual capi al (IC) in he annual e- po is conside ed one o ac ion done olun- a ily. In his espec , Boone and Raman (2001) a gue ha he IC can imp o e he pe cep ion o he ma ke in ela ion o he company's liquidi y. This is e idenced by Abdol Mohammadi & Mohammad (2005); Siho ang & Wina a (2008), in hei esea ch, i was ound a posi i e co ela ion be ween IC disclosu e and a ma ke capi aliza ion o a company. In connec ion wi h he abo e a gumen , he e a e some empi ical indings which show a endency o inc ease he company’s IC disclosu es in hei annual epo s (see esea ch Whi e e al. (2007); B uggen e al. (2009); Abdolmohammadi (2005); Ga cia- Meca e al. (2005 ); Bozzolan, Fa o o, & Rice i 2003; Pu nomosidhi 2006; Siho ang & Wina a 2008). O he s udies also show he same e idence such as in Aus alia (B uggen e al. 2009), I aly (Bozzolan, Fa o o, & Rice i 2003), and Indonesia (Pu nomosidi 2006). Som p e ious s udies on IC disclosu e ocused on he companies engaged in indus- ial, manu ac u ing, and non- inancial com- panies such as B uggen e al. (2009) examin- ing he co po a e disclosu e o IC indus y in Aus alia. Bukh e al. (2005) in he IT com- panies, se ices, ade, manu ac u ing, and pha maceu icals in Denma k. Bozzolan, Fa- o o, & Rice i (2003) compa ing he high- ech indus ies and adi ional companies in I aly. Ga cia-Meca e al. (2005) also s udied he annual epo s o companies lis ed on s ock exchanges in Spain in 2000 o 2001. Siho ang & Wina a (2008) in es iga ed he la ges echnology company in Indonesia in 2002 o 2004. Whi e e al. (2007) s udied he bio echnology company in Denma k. Thus, he IC disclosu e is a ec ed by bo h local and global ac o s. The examples o he local ac o s a ec ing IC disclosu e a e among o he s: economic de elopmen , poli ical ci cums ances, and he s abili y o he coun y, while global ac o s such as in- e na ional policy, in e -na ional egula ions, one o which is a deal o use global s an- da ds in he p epa a ion o he inancial s a emen s o he company. The Implemen a ion o IFRS which is p inciple-based ine i ably leads o a ia ions in he company's annual epo disclosu e. In such ins ance, he accoun an p o essional judgmen in inancial epo ing is equi ed because he p inciple-based IFRS me hods do no p o ide de ailed calcula ions and he ag eed disclosu es. The g oup o he Eu o- pean Union is selec ed as he sample in his s udy because o heses coun ies a e ca ego- ized in o he pionee g oup o coun ies in- cluding he In e na ional Financial Repo ing S anda ds (IFRS) adop ed by he In e na- ional Accoun ing S anda ds (IAS). Since 2005, IFRS has been adop ed as a s anda d o inancial epo ing in Eu ope. Banking companies in Eu ope a e used as he sample. This is expec ed o iden i y and measu e how he impac o agg ega e use beha io o he global s anda ds which a e ini ially expec ed o educe he gap o inan- cial epo ing among he coun ies in acing he p inciple-based companies ha need p o- essional judgmen . This has he po en ial o inc ease a ia ions in epo ing. IFRS has he main goal o imp o ing compa abili y o he inancial s a emen s among companies o di e en coun ies. The main objec i e is achie ed by changing he main idea o a s anda d ha is ule-based which used o be he p inciple-based. P inci- ple-based is ini ia ed by he aim o each coun y using he in e na ional s anda ds in p epa ing inancial s a emen s. These s a e- men s will be easily unde s ood by a ious s akeholde s wi hou bo de s. The p inciple- bad can only be achie ed when using p o- essional judgmen in de e mining any ans- ac ions ha occu in he company. P o essional Judgmen among indi idu- als in an o ganiza ion has ansac ions which a e di e en because hey ha e di e en edu- ca ional backg ound, knowledge and expe i- ence. The subjec i i y a e he inhe en ac o s when people classi y a ansac ion ha is no Jou nal o Economics, Business, and Accoun ancy Ven u a Volume 16, No. 1, Ap il 2013, pages 105 – 118 Acc edi a ion No. 80/DIKTI/Kep/2012 107 egula ed in de ail and being igid in he in- e na ional accoun ing s anda ds (IFRS). In addi ion, such subjec i i y can di e among he indi iduals when compa ed be ween o - one o ganiza ion and ano he in a coun y. This is due o he ac ha he o ganiza ion has i s own cus oms in p ocessing ansac- ions ha equi e p o essional judgmen . P o- essional judgmen he di e ences will be mo e appa en when compa ed be ween coun ies ha a e geog aphically dispe sed. The di e ences in he abili y o p o es- sional judgmen o he epo lead o he po- en ial eme gence o inancial epo ing a ia ion in he companies. As an in e - na ional s anda d, IFRS is aimed a educing he gap o inancial s a emen s among he coun ies. The e o e, his s udy aises a p oblem whe he IFRS, using as i s main p inciple based concep , can educe he i- nancial s a emen s gap among he coun ies when he analys equi es p o essional judgmen in p epa ing inancial s a emen s. THEORETICAL FRAMEWORK Some heo ies unde lying his esea ch con- ce n s akeholde heo y, legi imacy heo y, and signaling heo y. S akeholde heo y a gues ha he o ganiza ion would p e e a olun a y basis disclose o in o ma ion e- la ed o en i onmen al pe o mance, social and in ellec ual, exceeding hei obliga ions because he company has in e ela ed con- nec ion wi h he s akeholde s. Thus in es- o s, c edi o s, and go e nmen and so on a e he igh pa ies ela ed o he company wi h powe o a company. The company’s o e all e o o mee he expec a ions o s akeholde s equi es com- panies o disclose he company's non- inancial and inancial in o ma ion. One o he examples o non- inancial in o ma ion in he o m o in angible in o ma ion is In el- lec ual Capi al (IC). The pe spec i e o le- gi imacy heo y s a es ha o ganiza ions con inuously look o ways o ensu e he sus ainabili y o hei business. This is wi hin he limi s and no ms p e ailing in socie y (Deegan 2004). So, hey s i e o ensu e ha he ac i i y is accep ed by ou - side s as pa o he su ounding communi y (Deegan 2004). In his condi ion, IC disclosu e is eally one o he company’s business o be ac- cep ed by he su ounding socie y as a o m o legi ima ed company o he public. The accoun abili y o such IC disclosu e o in el- lec ual capi al managemen has become an ex e nal legi imacy o he company ela ed o in ellec ual capi al. The IC disclosu e managemen o he company mus be com- plied wi h egula ions. This is impo an o he company because i shows he alidi y o he company o manage i s in ellec ual capi- al. As e e ed o he e iew o s akeholde heo y and legi imacy heo y, i can be con- cluded ha bo h heo ies ha e a di e en emphasis on he pa ies ha may a ec b oad whis leblowe 's in o ma ion in he company's annual epo . The s akeholde heo y ends o conside mo e on he posi- ion o he s akeholde s who a e conside ed powe ul. The s akeholde g oup is he p i- ma y conside a ion o he company o dis- close o no o disclose in o ma ion in he inancial s a emen s. Ye , he heo y o le- gi imacy and alidi y ocused on he public pe cep ion as a majo impe us in making a disclosu e o in o ma ion in he annual e- po . The nex is a signaling heo y. This he- o y sugges s ha o ganiza ions will seek o show a posi i e signal o in es o s h ough he mechanism o an annual epo (Mille & Whi ing 2005). In his case, manage s ha e a mo i a ion o e eal p i a e in o ma ion olun a ily because hey hope he in o ma- ion can be in e p e ed as a posi i e signal associa ed wi h company pe o mance. This ac ion is also done o cu down on he in- o ma ion asymme y be ween he agen and he p inciple (Oli ei a e al. 2004). Besides ha , olun a y disclosu e o IC in o ma ion enables he in es o s and s ake- holde s o assess he abili y o he company o be be e educe he pe cei ed isk (Wil- liams 2001; Mille & Whi ing 2005). The ISSN 2087-3735 The T end and Va ia ion … (Asca yan Ra inda) 108 company discloses IC in o ma ion in annual epo s in o de o sa is y he in o ma ion needs by he in es o s and po en ial in es- o s, as well as o inc ease he alue o he company (Mille & Whi ing 2005). In angible Asse s So a , he e has bee con usion in dis in- guishing IC and in angible asse s (ASB 1997; IASB 2004). In his condi ion, in an- gible asse was e en e e ed o as goodwill (ASB 1997; IASB 2004) and he IC was also conside ed as pa o goodwill. Howe e , oday, a numbe o con empo a y classi ica- ion schemes ha e a emp ed o iden i y he speci ic di e ences by sepa a ing he IC in o he ca ego y o ex e nal (cus ome - ela ed) capi al, in e nal (o ganiza ional) capi al, and human capi al (B ennan & Connell 2000; Ed insson & Malone 1997). Some a gumen s by he esea che s such as Bukh, (2003) s a es ha he IC and in an- gible asse s a e he same bu hey a e also o en in e changeable (o e lap). O he e- sea che s (e.g. Ed insson & Malone 1997; 2006) desc ibed ha he IC is pa o in angi- ble asse s. Pa ag aph 08 o he inancial ac- coun ing s anda d (PSAK) 19 ( e ised 2000) de ines in angible asse s as non-mone a y asse s so ha i can be iden i ied and has no physical o m and o use in p oducing o deli e ing goods o se ices, leased o o he s, o o adminis a i e pu poses. The de ini ion abo e is he adop ion o he e ms ha a e p esen ed by IAS 38 on in angible asse which is ela i ely simila o he de ini ion p oposed in IFRS 10 on good- will and in angible asse s. Bo h IAS 38 and FRS 10 s a e ha in angible asse s a e as ollows: (1) can be iden i ied, (2) ins ead o inancial asse s (non- inancial/non-mone a y asse s), and (3) has no physical subs ance. Con e sely, APB 17 on in angible asse s does no p esen a clea de ini ion o in an- gible asse s. In ellec ual Capi al (IC) I is s a ed by Bon is (2001) ha one he al- ues o he company h ough hei is he alue o knowledge. I is assumed ha inc easing and using he knowledge is bene icial o imp o ing he pe o mance o company. In his case, knowledge can be di ided in o h ee ca ego ies: knowledge ela ed o em- ployees (human capi al), knowledge ela ed o he cus ome (cus ome /ex e nal capi al), and knowledge ela ed o he company (in- e nal o o ganiza ional capi al). The h ee kinds o knowledge can es ablish an in ellec- ual capi al o he company. Boekes ein (2006) sugges s ha in ellec ual asse s can be aken as IC. Resea ch Hypo hesis Helly & Palepu (1993) e ealed ha he s a - egy o disclosu e is a means o media which is e y impo an o manage s o manage s. This may a ec o ha e an impac on he de- cisions by he in es o s om ou side owa d in es men o he company. Diamond and Ve ecchia (1991) ound ha olun a y dis- closu e can educe he in o ma ion asymme- y be ween he company and he ma ke so ha he company can acili a e s ock ading. Healy e al. (1999) using he le el gi en o he analys quali ies o he disclosu e o in o ma ion in he esea ch. They ound ha company wi h high a ings in disclosu e o expe ience signi ican ly highe sha e p ice pe o mance a e he announcemen o a ise in he ankings. Some p e ious e- sea che s also ound ha he e is an inc eas- ing end in he IC disclosu e in each com- pany in he sample (Gu ie & Pe y, (2000), Whi e e al. (2007); B uggen e al. (2009); Vandemaele e al. (2005) ; Abdolmoham- madi, (2005); Bukh e al. (2005), Ga cia- Meca, (e al) 2005; Bozzolan, Fa o o, & Rice i (2003); Pu nomosidhi, (2006); Siho- ang & Wina a (2008). The abo e e idence implies ha he disclosu e o IC is inc eas- ingly becoming an impo an ole and a s a- egic company in o ma ion. Based on some a gumen s in some s udies abo e, he i s hypo hesis can be s a ed as he ollowing. H1: he e is a end o inc easing IC disclo- su e in he banking companies in Eu ope in he pe iod 2007-2009. Jou nal o Economics, Business, and Accoun ancy Ven u a Volume 16, No. 1, Ap il 2013, pages 105 – 118 Acc edi a ion No. 80/DIKTI/Kep/2012 109 Di e ences o he o ma a e in luenced by he o ma o he inancial s a emen s o he s anda d ag eemen used in each coun y. Al hough all he coun ies ha joined he Eu opean Union use he same s anda ds o IFRS, a ia ions in inancial epo ing o - ma a e s ill possible gi en he IFRS is p in- ciple-based and no ule-based. Se e al e- sea che s ha e p o ided empi ical e idence ha e e y s a e has a wide a ie y o IC dis- closu e in he annual epo s. This a ia ion is shown in Table 1. In ellec ual capi al can be a ained om he h ee ca ego ies o knowledge such as human capi al, cus ome /ex e nal capi al, in e nal and/o ganiza ional capi al. Based on he heo y and he esul s o p e ious s ud- ies, he s udy a emp s o ind ou he a ia- ion o he olume o IC disclosu e in se - e al banking companies in Eu ope h ough se e al hypo heses as he ollowing. H2 : The e a e di e ences in he olume o IC disclosu e in in e nal capi al ca ego y in banking companies in Eu ope du ing he pe iod 2007-2009. H3 : The e a e di e ences in he olume o IC disclosu e in ex e nal capi al ca ego y on banking companies in Eu ope du ing he pe iod 2007-2009. H4 : The e a e di e ences in he olume o IC disclosu e in a ca ego y o human capi al in he banking companies in Eu ope du ing he pe iod 2007-2009. RESEARCH METHODS The popula ion was aken om banking companies in Eu ope in which i was done by means o pu posi e sampling echnique wi h he ollowing c i e ia: (1) Companies included in he lis o op 20 ma ke alue in Eu ope in 2010 by he Eu opean Cen al Bank. (2) The selec ed company is a com- pany ha has he highes ma ke alue in each coun y. This is done on he basis o s a emen s Abidin (2000) s a ing ha he ma ke alue happen ei he because he IC concep ha plays a ole in inc easing a company's alue. The selec ion o such sam- ples is expec ed o desc ibe he le el o IC disclosu e a e a ied and can be used o measu e he olume o IC de elopmen dis- closu e o se e al coun ies in Eu ope. (3) The Company publishes an annual epo du ing 2007-2009 on he websi e. Analysis In ellec ual Capi al (IC) is measu ed using 18 i ems classi ied in h ee ca ego ies: in e - nal capi al, ex e nal capi al, and human capi- al. These indica o s ha e been modi ied by S eiby (1997) and used o measu e IC dis- closu e p o essionally (IFAC 1998; SMAC 1998). The 18 i ems a e iden i ied as shown in Table 2. Table 1 Pe cen age o IC Disclosu e Based on Ca ego ies Resea che s Coun y Ex e nal Capi al In e nal Capi al Human Capi al Gu h ie, e al. (1999) Aus alia 40% 30% 30% B ennan (2001) I eland 40% 30% 30% Ap il, a al (2003) Sou h A ica 40% 30% 30% Bozzolan, e al. (2003) I alia 49% 30% 21% Abeyseke a & Gu h ie (2005) S i Lanka 44% 20% 36% Ci on, e al. (2005) Uni ed Kingdom 60% 26% 14% Vandamaele, e al. (2005) Ne he lands, Sweden and Uni ed Kingdom 40% 30% 30% Oli e as & Kaspe skaya (2005) Spain 51% 28% 21% Oli e a, e al. (2006) Po ugal 48% 25% 27% S eenkamp (2007) New Zealand 36% 11% 53% Sujan & Abeyseke a (2007) Aus alia 48% 31% 21% Sou ce: In ellec ual Capi al Disclosu e T ends: Singapo e and S i Lanka (Abeyseke a 2008). ISSN 2087-3735 The T end and Va ia ion … (Asca yan Ra inda) 110 Con en Analysis Con en analysis consis s o h ee s ages, namely: (1) choosing a amewo k ha is used o classi y in o ma ion, (2) de ining he uni o analysis, and (3) coding (Gu h ie e al. 2004). In he encoding phase, 18 i ems a e used as a measu e o he olume o IC disclosu e in he annual epo . A company is said o disclose in ull i he i em disclosed is 18 and his is gi en a maximum alue o 1 o each i em disclosed. When he disclosu e is no ull, i is gi en a p opo ional sco e ha anges om 0 o 1 by using wo decimal digi s a e he decimal poin . Th ee kinds o con en analysis ool used in his s udy a e as ollows. 1. Disclosu e Index (DI), which is he num- be o IC disclosu e measu ed by he numbe o i ems disclosed and hen con e ed in o he shape index. DI is di ided in o 3 ypes: Numbe o Disclosu e Index (NDI), Any Fo m Disclosu e Index (AFDI), and Disclo- su e Index (DI). AFDI, NDI, and DI a e measu ed using 18 i ems o he exis ing dis- closu es. AFDI measu e IC disclosu e by gi ing a sco e o 1 o each i em ha is ex- p essed in he o m o numbe s, wo ds, g aphs o images. I he e a e 18 i ems disclosed, he o al sco e is 18. NDI measu e IC disclosu e by gi ing a sco e o 1 o each i em ha is ex- p essed in nume ic o m. NDI can be objec- i ely measu ed by IC disclosu e as no o cause a lo o pe cep ions as o he e ela ion in he o m o wo ds o g aphics. IN meas- u es IC disclosu e o p o ide a sco e o 1 o each i em ha is exp essed in he o m o ex /wo ds, numbe s, and g aphics / images). 2. Wo d Coun measu es he olume o IC disclosu e by calcula ing he numbe o wo ds ela ed o IC. 3. Wo d coun Pe cen age (WC %) measu es he pe cen age o wo ds ha exp esses he IC compa ed o he o al wo ds in he annual epo . Hypo hesis Tes ing To es he end o IC disclosu e olume inc ease, (hypo hesis 1), i uses he leas squa e end equa ion and he o mula as ollows. Y = a + bX. (1) In which: n Y a ∑ = ∑ ∑ =2 X XY b X = ime, Y = pe iodic da a o end alue o a ce ain pe iod. To es whe he he e is di e ence in he olume o IC disclosu e (hypo hesis 2, 3, and 4); i uses he es o One Way ANOVA (Analysis o Va iance). This es ool is used o es whe he wo o mo e independen popula ions ha e di e en means. ANOVA echnique is used o es he a iabili y o he obse a ions o each g oup and he mean a iabili y among he g oups. Using bo h he a iabili y, i can d aw conclusions conce ning he popula ion Table 2 Classi ica ion o In ellec ual Capi al In e nal Capi al Ex e nal Capi al Human Capi al In ellec ual P ope y Managemen philosophy Co po a e Cul u e Managemen P ocess In o ma ion / ne wo k sys ems Financial ela ions B ands Cus ome s Cus ome s sa is ac ion Company names Dis ibu ion channels Business collabo a ions Licensing ag eemen s Employees Educa ion T aining Wo k- ela ed knowledge En ep eneu ial spi i Sou ce: In ellec ual Capi al Repo ing: Lesson om Hong Kong and Aus alia (James Gu h ie, Richa d Pe y, Fede ica Ricce i, 2007). Jou nal o Economics, Business, and Accoun ancy Ven u a Volume 16, No. 1, Ap il 2013, pages 105 – 118 Acc edi a ion No. 80/DIKTI/Kep/2012 111 mean. The esul s o ANOVA show a di e - ence in he o e all olume o IC disclosu e, bu no o show which banks ha e he dis- inc ion is signi ican when compa ed among hem. The e o e, when he esul o he ANOVA es is p o ed he e is a di e ence, he es is ollowed by a pos hoc es o de- e mine di e ences in he olume o IC dis- closu e ha occu s among g oups a e com- pa ed. DATA ANALYSIS AND DISCUSSION When conce ning he sample, he a ge popula ion is 20 companies included in he op 20 banking ca ego y by ma ke alue e sion o he Eu opean Cen al Bank. The sample selec ion is he ep esen a i e o banks om each coun y included in he op 20 ma ke alue o banking in Eu ope as e e ed o Abidin, (2000). I is s a ed ha he ma ke alue is due o he concep o IC which is a majo ac o ha can inc ease a company's alue. By such asse ion abo e, he samples o desc ibe he le el o IC disclosu e a e a ied and can measu e olume IC's de elopmen s om se e al coun ies in Eu ope. Based on hese c i e ia, 8 ep esen a i es a e selec ed wi h hei highes alues hei coun ies. Eigh banks a e he banking company ep e- sen a i es om each coun y which a e di - e en . O eigh companies, only 6 compa- nies ha ha e comple e da a o a con en analysis. These six banks a e Bank San ande , UBS Bank, BNP Pa ibas Bank, Deu sche Bank, ING G oup, In esa San- paolo. The Fi s Hypo hesis Tes ing Visually, he end es can be used o de e - mine he end ( endency) o an inc ease o dec ease in he a e age a any gi en ime o pe iod. The summa y can be seen in Table 3. The comple e pic u e o he es esul s o his end can be seen in Figu e 1 (Ap- pendices). The leas squa e end es esul s show ha 5 o he 6 companies ha e posi i e b coe icien s, only he coe icien b UBS which has a nega i e (-). The esul o coe - icien b is no en i ely posi i e (+), hen he hi-hypo heses which s a e ha he e is a end inc ease in he olume o IC disclosu e in co po a e banking in Eu ope 2007-2009 canno be p o ed wi h he da a. The esul abo e is consis en wi h e- sea ch by Abeyseke a (2008) who ound no de elopmen o IC disclosu e in 20 compa- nies in S i Lanka in 1998-2000. Such deci- sion o ejec ing he i s hypo hesis is done by p udence in decision-making, al hough 5 o 6 samples e ealed ha his unde goes an inc ease o IC disclosu e bu i can no be said ha he 6 sample ep esen ing 20 com- panies’ a ge ed popula ions ha e expe i- enced an inc ease o IC disclosu e in he yea 2007-2009. Fi e o he six samples inc eased he end olume o IC disclosu e in he o m o ex du ing he yea s 2007-2009, bu he end UBS (Swi ze land) has dec eased in he las 3 yea s. The e o e, lowe ing he ol- ume o IC disclosu e on UBS can be seen as based on he con en analysis. The dec ease is due o he si ua ion in 2008 and 2009, in which he e was he one UBS ocusing on Table 3 Resul s o T end Analysis Tes Bank Simila i y o T end Leas Squa e Coe icien b BNP Pa ibas Y = 8028.67 + 299.00X + Banco San ande Y = 5663.67 + 1747.00X + UBS Y = 11364.33 – 166.50 X - Deu sche Bank Y = 8206.00 + 2641 X + ING G oup Y = 9625.33 + 1934.50 X + In esa Sanpaolo Y = 11375.67 + 628.00 X + Sou ce: Seconda y da a p ocessed in 2011. ISSN 2087-3735 The T end and Va ia ion … (Asca yan Ra inda) 112 add essing he impac o he global c isis. The global c isis in 2008 led UBS o ocus on he e ela ion o he company's handling o he c isis. Some quo es ha explain he impac o he global c isis in 2008 o UBS a e as ollows. The yea o 2008 was one o he mos di icul condi ions o he inancial se - ice indus ies. As he c isis deepened o e he cou se o he yea , he p oblems in he inancial indus y sp ead o o he pa s o he wo ld economy. “(UBS Annual Repo 2008, p. 20) Re- sponses o he c isis included he injec- ion o new capi al in o many o he wo ld’s majo inancial ins i u ions by Go e nmen s. Wi h hindsigh , i is clea ha UBS was no p epa ed o his. Ou balance shee was oo la ge and he sys- ems o isk con ol and isk manage- men ha should ha e limi ed ou expo- su e ailed.….” (Le e om CEO o UBS, (UBS annual epo 2008 page: 4). The ocus o he global c isis g ea ly a - ec s he b oad UBS co po a e olun a y disclosu es. This also esul ed in UBS ex- pe iencing a ne loss o 12.45 billion Swiss ancs in 2008, equi alen o U.S. $ 11.3 billion. In 2009 UBS swallow 2.7 billion Swiss ancs loss. This o ced UBS o abol- ish he di ision o in es men -clicking and s op he 6,000 employees in 2008. Some businesses like commodi ies, eal es a e and secu i ies also had o be s opped because o a se e e ecession. The UBS a emp o imp o e s ake- holde con idence in which such a si ua ion is down due o he ecession. This, in u ns, mul iplies he e ela ion o in o ma ion abou he handling global c isis o 2008. I aims o con ince s akeholde s ha he com- pany can s ill ake place al hough i was in a s a e o se e e ecession. UBS hings done can be explained by signaling heo y, whe e decisions UBS e- ealed e o s o add ess he c isis in 2008 and in 2009 an e o o p o ide a posi i e signaling o s akeholde s. This is in line wi h he disclosu e Oli ei a e al. (2004) who ex- plains ha he manage has a mo i a ion o disclosing p i a e in o ma ion olun a ily because hey hope he in o ma ion can be in e p e ed as a posi i e signal abou he company's pe o mance and o educe in- o ma ion asymme y. Second Hypo hesis Tes ing As based on he calcula ion o e o le el ha is (α ) = 0.05, wi h an e o a e ( he ob ained calcula ion o F alue is 2.627 while he F able alue a 3.11. Due o he calcula ed alue o F able is > ha o calcula ed F and p- alue is 0.079> 0.05 hen he e is no di e - ence in he o e all olume o disclosu e on in e nal capi al ca ego y. So, he hypo hesis ha he e is di e ence in he olume o in e - nal capi al disclosu e in annual epo s o banking companies in Eu ope 2007-2009 pe iod is no p o ed wi h he e idence. Thi d Hypo hesis Tes ing Based on e o le el calcula ion (α) = 0.05 on he esul s o he calcula ion wi h an e o a e (ob ained calcula ed F alue o 4.209 while he F able alue a 3.11. Due o he alue o F calcula ed is > F able and he p- alue 0.019 <0.05, i can be concluded ha he e is a di e ence in olume o ex e nal capi al ca ego y disclosu e. So, he hypo he- sis ha he e is di e ence in he olume o ex e nal capi al disclosu e in annual epo s o banking companies in Eu ope is sup- po ed wi h he 2007-2009 da a. In de ail is ela ed o pos hoc es which is conduc ed o de e mine whe e he samples a e expe iencing di e ences in ex e nal capi al. Based on his es on ex e nal capi- al, i he p- alue is <0.05, i can be con- cluded ha he e a e a ia ions in he ol- ume o disclosu e. A pos hoc es is ex- pec ed o see whe e he samples we e ound o ha e signi ican di e ences in he ex e nal capi al. The esul s o pos hoc can be seen in Table 4. Fou h Hypo hesis Tes ing Again, as e e ed o he calcula ion, he e - o le el esul is (α ) = 0.05 wi h an e o Jou nal o Economics, Business, and Accoun ancy Ven u a Volume 16, No. 1, Ap il 2013, pages 105 – 118 Acc edi a ion No. 80/DIKTI/Kep/2012 113 a e (ob ained calcula ed F alue o 13.024, while he alue o F able is 3.11. This means i can ha he e is di e ence in he olume o he disclosu e o he human capi- al ca ego y. Hypo hesis which says he e is di e ence in he olume o human capi al disclosu e in annual epo s o banking com- panies in Eu ope du ing 2007-2009 is in ac p o ed wi h he da a as p esen ed in Table 5. The di e ences o IC disclosu e among he companies ep esen each o he di e en coun ies in Eu ope as in he esul s o he s udy by Abeyseke a (2008) who ound di - e ences in ex e nal disclosu e and human capi al in he coun y o S i Lanka and Sin- gapo e. The di e ences in olume IC disclo- su e in ex e nal and human capi al ca ego y a e due o se e al ac o s such as he coun- y's economy, go e nmen policy, and a a ie y o egula ion, hund eds in he coun- y in ques ion ha a ec s he olume o IC is disclosed. Ye , he a ia ions in IC disclosu e a e due o lack o de ailed ule go e ning how in ellec ual capi al should be epo ed in he annual epo . In e na ional Financial Re- po ing S anda ds (IFRS) which is based p inciple can c ea e di e ences in he p epa- a ion o inancial s a emen s applied in he use o p o essional judgmen by he ac- coun an s. Wi h he ules-based sys em as in he Gene al Accep ed Accoun ing P inciples (GAAP), he accoun an s can ob ain de ailed implemen a ion ins uc ions, he eby educ- ing unce ain y and gene a ing applica ion speci ic ules in he s anda d mechanically. In a p inciple-based sys em, he accoun an s will make a numbe o es ima es ha make hem accoun able and equi e mo e p o es- sional judgmen (Schippe 2003). By com- pa ing he h ee s anda ds by Benne h e al. (2006), i can be concluded ha p inciple- based s anda ds equi es good p o essional judgmen on he le el o ansac ions in he inancial s a emen s le el. CONCLUSION, IMPLICATION, SUG- GESTION AND LIMITATIONS I can be gene alized as he ollowing ha UBS (Swi ze land) dec ease he disclosu e o in ellec ual capi al o Swi ze land in Table 4 Pos Hoc (Ex e nal Capi al) Bank Bank Sig UBS Deu sche Bank .041 UBS In esa Sanpaolo .002 In esa Sanpaolo ING G oup .005 BNP Pa ibas In esa Sanpaolo .009 Sou ce: The Seconda y da a p ocessed in 2011. Table 5 Pos Hoc (Human Capi al) Bank Bank Sig UBS Banco San ande .002 UBS BNP Pa ibas .003 UBS Deu sche Bank .000 UBS ING G oup .011 UBS In esa Sanpaolo .000 In esa Sanpaolo Banco San ande .003 In esa Sanpaolo BNP Pa ibas .001 In esa Sanpaolo Deu sche Bank .019 In esa Sanpaolo ING G oup .000 In esa Sanpaolo UBS .000 Sou ce: Seconda y da a p ocessed in 2011.