Accounting Information Quality of Intangible Assets in Bio Firms: Evidence from R&D Capitalization and Value Relevance

Purpose: This study examines the value relevance of accounting information related to intangible assets and research and development (R&D) in bio firms and evaluates accounting information quality from a value relevance perspective. In particular, the study considers the regulatory environment surrounding the 2017–2018 regulatory inspections on R&D accounting as an institutional background and investigates the information usefulness of accounting information in an intangible asset–intensive industry.Methods: This study examines firms listed on the Korea Exchange over the period from 2021 to 2024. The empirical analysis is conducted based on the Ohlson (1995) valuation model to investigate the value relevance of accounting information.Results: The results show that book value, earnings, and intangible assets are all positively and significantly associated with firm value. In addition, all interaction terms between accounting variables and the bio firm dummy are statistically significant, indicating that the value relevance of accounting information is generally stronger for bio firms. In particular, intangible assets exhibit the strongest value relevance, suggesting that they serve as a key determinant of firm valuation in the bio industry.Conclusion: These findings imply that despite the high level of managerial discretion, accounting information in bio firms provides meaningful information to the capital market and exhibits high information usefulness. This study contributes to the literature by highlighting the role of industry characteristics and regulatory environment in shaping accounting information quality, particularly in intangible asset–intensive industries.