Ascertain If Advertising Expenditure Is Value Relevant

CHAPTER 1: INTRODUCTION 1.1 Background to the Study In recent years, much attention has been paid to whether certain expenditures generate intangible assets, and how these expenditures should be accounted for in financial statements (see, for example, Lev, 2001; Hand & Lev, 2003). However, relatively little attention has been given to advertising activities as possible creators of intangible assets (Shah, Stark & Akbar, 2009). Advertising expenditure is found to be effective in creating awareness, enhancing consumer knowledge, and influencing both short-term and long-term consumer pref…