Abstract:
This study examines voluntary Intellectual Capital (IC) disclosure provided
by Sri Lankan firms in annual reports from the year 2016/17. A 100-firms
sample, from the Colombo Stock Exchange (CSE)-listed firms. Findings
suggest that Sri Lankan firms, on average, are aware of the significance of IC
disclosure. Concerning the descriptive analysis, the results indicate that most
of the information reported (41 percent) is related to human capital; 31
percent is related to relational capital and the 21 percent concerns structural
capital disclosure. The results also suggest that industry nature and firm size
play a key role as a determinant for the disclosure of IC in Sri Lankan annual
reports. As there is no definite IC disclosure framework has been established
within Sri Lankan firms. Concurrently as Sri Lanka passes through its post war-recovery phase, reform of its mutually agreed financial reporting
framework is essential to reduce information asymmetry and therefore
reducing the agency costs.
