Intellectual capital accounting and reporting in the knowledge economy

Abstract

Claims the greatest challenge facing the accounting profession is understanding the huge difference between its balance sheet and market valuation. This gap represents the core value of the company ± its intellectual capital represented by brands, products, competitive advantage, patents, trade marks, customer relationships, R&D, human capital etc. The present financial accounting framework is criticised, especially in the USA and Europe, as inadequate and failing to communicate the most important assets and resources of today's business, known as intangible assets or intellectual capital. As a result, there is a huge value gap and distortions between a business entity value as reported in the financial statements with the value put by investors on the stock market or even in merger and acquisitions cases. In the new knowledge economy (k-economy), knowledge rather than physical assets drives innovations, revenue and profits growth, and nurtures new competitive advantages. Looks at the challenges encountered by accounting and where it is heading in the k-economy environment.

The Impact of Intellectual Capital on the Financial Performance of Listed Companies in Tehran Stock Exchange

“…Knowledge of today's top tools of economics is, where heroic acts economics, science and technology, there is increasing use of information. Knowledgebased companies have a large proportion of their investments in intangible assets and for finance and accounting management for companies that traditionally have Unobtrusive performance in different financial situations did not reflect a real challenge of remains (Seetharaman, 2002). Longer tangible riches and natural assets of communities and organizations are keys of success.…”

Modelling the creation of value from intellectual capital: a Portuguese banking perspective

“…The concept of intellectual capital is still unknown to many because it is difficult to measure in explicit terms (Bontis, 1999;Seetharaman et al, 2002). Chaharbaghi and Cripps (2006, p.30) argue that "it is impossible and undesirable to reduce intellectual capital to a calculable number that establishes whether an organization's intellectual capital has increased or diminished".…”

The relationship between organizational learning capability, intellectual capital and job satisfaction in sport organizations

“…Daha önceleri örgütlerin zenginlik yaratmada kullandıkları arazi, fabrika gibi sermaye varlıklarının yerini şimdilerde entelektüel sermaye varlıkları almıştır (Stewart, 1997). Entelektüel sermayenin sayısal olarak da ifade edilmesinde kullanılan ve defter değeri ile piyasa değeri arasındaki farkı ifade eden rakamlar entelektüel sermayenin çıkış noktasıdır (Seetharaman, 2002). Entelektüel sermaye bilgi ve yenilikçiliğin örgütlerin sürdürülebilir rekabet avantajı sağlamada başvurdukları faaliyetler olarak tanımlanabilir.…”