A Comparative Analysis between Conventional and Islamic Banks
Aims and Objectives
The aims of this research are to distinguish the measurement and disclosure of intangible assets between Islamic and conventional banks and identify the impact of this disclosure of intangible assets on the fair value of the entity.
In order to achieve the aims of the research, the following objectives are identified:
• To measure the disclosure of intangible assets of the sampled Islamic and conventional banks.
• To determine the different sets of intangible assets disclosed by the Islamic and conventional banks.
• To measure, compare and contrast the disclosure of fair value of the sampled Islamic and conventional banks.
• To measure the impact of intangible assets disclosure on the fair value of the sampled Islamic and conventional banks.
• To determine the impact of intangible assets disclosed on the firm’s fair value taking into account their expected cash flows.
Research Hypothesis
Based on the research aims and objectives the following hypotheses are developed:
H1: The disclosure of the intangible assets has a statistically significant effect on the fair value of the Islamic banks.
H2: Intangible asset disclosure plays a significant role in the intermediation of the relationship between the intangible asset and fair value of the Islamic banks.
H3: There is no difference in the value relevance of intangible assets for Islamic and conventional banks.
Research Questions
The main research question investigated in this research is: How does disclosure of intangible assets impact the fair value of banks and is this different for Islamic and conventional banks?
Therefore, the main question is broken down into several specifics that will be answered in the research:
RQ1: How may intangible assets of Islamic banks can be measured and disclosed in the financial statements?
RQ2: How much investment in intangible assets leads to the improvement of the value of the Islamic banks compared to conventional banks?
RQ3: Is there a difference in the intangible assets of conventional and Islamic banks?
RQ4: What are the relationships among different intangible elements and fair value?
RQ5: To what extent do the measurement and disclosure of intangible assets affect the fair value of the Islamic banks compared to conventional banks?
RQ6: Is there a significant role of intangible assets in determining the effects of the measurement on the fair value of the Islamic banks?
Chapter Five -Research Methodology and Research Design
Since this study aims to explore the impact of the intangible assets disclosure on the fair value of the examined banks, firstly we need to begin with the measurement of intangible assets disclosure. This is fairly straightforward in IFRS. The disclosure data of the intangible assets will be obtained from the annual reports by utilising the content analysis method, the fair value and other bank specific variables which will be obtained from the financial statements of the sampled banks. Disclosure data can be classified as mandatory or voluntary.
The research sample consists of 25 Islamic commercial banks and 25 conventional commercial banks from several countries, namely: Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Kuwait. The examined data will cover the period from 2007 to 2016 (10 years).
In order to fulfil the research aims and objectives, the obtained data will be analysed by using SPSS software (Statistical Package for Social Sciences) and State Econometric Package.
This study will use different statistical and econometric methods to analyse the obtained data.
The study aims to explore the impact of the intangible assets disclosure on the fair value of the examined banks.
Please find the following equations:
A- How to measure the Intangible Assets Disclosure in the examined banks.
B- How to measure Fair Value in the examined banks.
C- How to measure the impact of measuring the Intangible Assets Disclosure on Fair Value in the examined banks.
Or you can use only one equation to find out all these requirements.
