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This paper aims to focus on how forecasts information is disclosed in IPO prospectuses. In France, managers report either detailed forecasts or only a brief summary.

The authors investigate the determinants and consequences of the varying levels of details provided in these forecasts. The research is based on a sample of 82 IPOs on the Euronext Paris market (2000‐2002).

The paper shows that only two variables are associated with highly detailed forecast disclosures: forecast horizon and firm age. It is also found that the forecast error decreases as the level of detail in the forecast disclosures increases. This finding is robust to a reverse causality test (Heckman two‐stage self‐selection procedure) and suggests that the level of detail in forecast disclosures enhances the reliability of earnings forecasts.

The paper suffers from at least two potential flaws. First, omitted variables, such as the possession of good news or proprietary costs. can influence both forecast errors and the level of detail of forecasts. Second, the negative association between the level of detail in forecast information and forecast errors may either show that detailed information leads to less forecast error or reflect a self‐selection bias.

This research could have implications for stock market regulators as it suggests that mandatory disclosure of highly detailed forecasts would improve the effeciency of the markets by reducing forecast error.

This paper contributes to be literature by presenting evidence tha the way forecast information is disclosed in IPO prospectuses is of importance and by documenting a negative association between forecast error and the level of detail in forecast disclosures.

The knowledge- and Internet-based economy demands a reexamination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic.

The study reviews the literature on research and development (R&D), a specific internally developed intangible asset, using meta-analysis techniques that allow to highlight the areas of consensus and disagreement in quantitative empirical results. The literature the authors review addresses four main research questions on (1) the determinants of the decision to capitalize R&D, (2) stock market-based outcomes of capitalizing R&D, (3) firm-based outcomes related to expensing R&D and (4) stock market-based outcomes of expensing R&D.

The authors find higher value relevance of capitalized compared with expensed R&D. There is, however, little robust evidence on the determinants of the capitalization decision and the characteristics of capitalizers.

The authors conclude by highlighting future research that can allow accounting academics to contribute to standard setting.