Intellectual capital disclosures in the annual reports: a comparative study of the Indian and Australian IT-corporations

The omission of IC information may adversely influence the quality of decisions made by shareholders, or lead to material misstatements. This study attempts to provide an insight into the style of IC disclosures done by the IT-sector corporations from India and Australia. We conducted a comparative study of 16 Indian and 20 Australian companies in which the `content analysis' was performed on their annual reports. The results of this study confirmed that IC disclosure by the companies from these countries are found to be low, mostly reported in a narrative form, and IC disclosure had not received any preference from the mentors of these corporations. A major recommendation for corporations is to develop strategic and tactical initiative that provide for 'voluntary' disclosing of IC. These initiatives may initially be used for internal management purposes, but an external stakeholder-focus IC report should be the ultimate long-run goal.