Can Managers Forecast Intangible Firms’ Earnings? Kasgari Ahmad Ahmadpour, Professor, Vahdani Mohammad, PhD student Accounting, The Mazandaran University, Babolsar, Iran Abstract The present study undertakes to evaluate the relationship between intangible assets and management forecasting error. Uncertainty and High information complexity of intangibles increase the difficulty of assimilating intangible information and complicate managements’ task of earnings forecast. On the other hand management earnings forecasts are adversely affected by the cost of information processing. The cost incurred by them is higher when process and analyse more complex information relating to the firm's future earnings. Accordingly, two hypotheses are projected to examine it. Independent variables are used, including R&D expenses, Goodwill and intangibles recognized on the firm's balance sheet. In order to test hypotheses, 94 companies listed at Tehran Stock Exchange in a span of 10 years (2002–2012), including 940 observations on year-company, are selected. Variables are analysed using static consolidated data and generalized least squares models. Results indicate a linear positive relationship between earnings forecast error and intangible assets. In addition, the positive association between them is stronger when the complexity of the intangibles increases. Top Keywords Management forecast error, intangible assets, R&D expenses, Goodwill. Top |