Measuring Intangible Capital: A Review of Current Practice

Hunter, Laurie; Webster, Elizabeth; Wyatt, Anne

doi:10.1111/j.1835-2561.2005.tb00288.x

Cited by 71 publications

(63 citation statements)

References 53 publications

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“…Hunter, Webster and Wyatt (2005) explain that a prime motivation for external disclosure of IC is signalling expected future growth of the firm to external stakeholders.…”

Section: Signallingmentioning

confidence: 99%

Intellectual capital disclosure from sell‐side analyst perspective

Abhayawansa

Abeysekera

2009

Jnl of Intellectual Capital

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Purpose -Research on the use/disclosure of intellectual capital (IC) information by sell-side analysts, using content analysis of their reports, is growing. The objectives of this paper are to establish the importance of this perspective in understanding the role of IC in communicating firm value, to introduce possible theoretical frameworks to interpret the findings of such studies, and to propose methodological developments. Methodology/approach -The paper argues for the need to look at IC from the perspective of sell-side analysts, and then advocates the use of several theoretical frameworks to enrich current understanding of the role of IC as it is used/disclosed by sell-side analysts. Current methodologies used in this type of research are critiqued with a view to proposing multiple research methods. Findings -Looking at IC from the sell-side analyst perspective helps us to understand how the capital market appreciates this information. However, IC information that analysts disclose cannot be taken at its face value. Issues of signalling, analysts' incentives/ influences, political economy view, and globalisation are introduced as providing theoretical frameworks for explaining IC disclosure in sell-side analysts' reports. To obtain a richer picture of the role of IC information in analysts' decision processes, multiple research methods are proposed. Practical implications -The proposals in this paper may inform and guide future research on IC information use/disclosure by sell-side analysts with theoretical underpinnings and methodological rigour. Originality/value -This paper is the first attempt to propose possible theories for interpreting findings of studies on IC use/discsloure by sell-side analysts and suggest multiple research methodologies in this type of research. sell-side analysts, using content analysis of their reports, is growing. The objectives of this paper are to establish the importance of this perspective in understanding the role of IC in communicating firm value, to introduce possible theoretical frameworks to interpret the findings of such studies, and to propose methodological developments.Methodology/approach -The paper argues for the need to look at IC from the perspective of sell-side analysts, and then advocates the use of several theoretical frameworks to enrich current understanding of the role of IC as it is used/disclosed by sell-side analysts. Current methodologies used in this type of research are critiqued with a view to proposing multiple research methods.Findings -Looking at IC from the sell-side analyst perspective helps us to understand how the capital market appreciates this information. However, IC information that analysts disclose cannot be taken at its face value. Issues of signalling, analysts' incentives/influences, political economy view, and globalisation are introduced as providing theoretical frameworks for explaining IC disclosure in sell-side analysts' reports. To obtain a richer picture of the role of IC information in analysts' decision processe...

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“…Hunter, Webster and Wyatt (2005) explain that a prime motivation for external disclosure of IC is signalling expected future growth of the firm to external stakeholders.…”

Section: Signallingmentioning

confidence: 99%

Intellectual capital disclosure from sell‐side analyst perspective

Abhayawansa

Abeysekera

2009

Jnl of Intellectual Capital

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“…A number of competing and diverse frameworks for the measurement, management and disclosure of intellectual capital exist in the current literature (Hunter, Webster & Wyatt, 2005;Kaufmann & Schneider, 2004). One of the most widely accepted is the Intellectual Capital Approach which is supported by a number of prominent authors in the field (see for example Brooking, 1996;Edvinsson & Malone;Kaplan & Norton, 1992;Roos, Roos, Dragonetti & Edvinsson, 1997;Rodgers, 2003;Stewart, 1997;Sveiby, 1997).…”

Section: Reviewmentioning

confidence: 99%

Intellectual capital reporting by the New Zealand local government sector

Schneider¹,

Samkin²

2008

Jnl of Intellectual Capital

120

162

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Purpose -The purpose of this paper is to assess the extent and quality of intellectual capital disclosures (ICDs) in the annual reports of the New Zealand local government sector. Design/methodology/approach -This paper makes use of an ICD index constructed through a participatory stakeholder consultation process to develop a disclosure index which measures the extent and quality intellectual capital reporting in the 2004/2005 annual reports of 82 local government authorities in New Zealand. The final index comprised 26 items divided into three categories: internal, external and human capital. Findings -The results indicate that the reporting of intellectual capital by local government authorities is varied. The most reported items were joint ventures/business collaborations and management processes, while the least reported items were intellectual property and licensing agreements. The most reported category of intellectual capital was internal capital, followed by external capital. Human capital was the least reported category. Research limitations/implications -There are a number of limitations associated with this study. First the research covered only one year (2004/2005) which makes it difficult to draw any trend conclusions. Second, differing legal reporting requirements may make it difficult to compare findings of this research with findings of research conducted in other jurisdictions. The final limitation of this study is its exploratory nature of this research and the use of a disclosure index to measure disclosure levels. Practical implications -The results in this paper indicate that local authorities are disclosing some aspects of intellectual capital in their annual reports. However, there is no consistent reporting framework and many areas of ICDs do not meet stakeholder expectations. Originality/value -This paper is unique in that it is the first study to make use of an ICD index to examine intellectual capital reporting by local government authorities.

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“…There are other classifications as well, but the differences are often rather related to the form than to the contents. Usually, intangible capital is considered equivalent to intellectual capital, but specialized literature (Hunter et al, 2005) showed that between them there is an inclusion relation, not equality. Intellectual capital could be assimilated to human capital, meaning the totality of the employees' knowledge and skills.…”

Section: Introduction Intangible Assets: New Sources For Developmentmentioning

confidence: 99%

Do the Romanian and Spanish Accounting Environments Meet the Challenges Concerning the Acknowledgement of Intangible Elements?

Fădur¹,

Ciotină²,

Mironiuc³

2012

JAARP

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Research motivation -Our aim is to identify the extent to which companies quoted in the Romanian and Spanish stock exchanges, that must apply the International Financial Reporting Standards truly comply with the provisions of these norms in presenting, in the financial statements, the information on intangible assets. We have also studied a series of indicators of intangible capital, in order to identify the extent to which the Romanian and Spanish accounting environments meet the challenges concerning the acknowledgement of intangible elements.Methodology -In order to identify the policies used by companies in the reporting of intangible assets and to determine the extent to which companies forced to apply the IAS/IFRS comply with the IAS 38 provisions, we have analyzed the consolidated financial statements, drawn according to IFRS by 19 Romanian companies quoted in the Bucharest Stock Exchange and 27 Spanish companies quoted in the Madrid Stock Exchange, components of the IBEX 35 index. We have determined the weight of the intangible assets in the fixed assets and have computed the mean degree of dissemination of the information on intangible assets based on the scores obtained by each company to a set of questions, designed in the spirit of the IAS 38 provisions.Main findings -To the 8 questions in the set, created in the spirit of the IAS 38 provisions, the Iberian companies generally give more analytical answers. Also, they present significant weights of the intangible assets into the fixed assets. Besides the financial reporting of intangible assets, we have been concerned with analyzing non-financial information referring to human, relational, and structural capital. It is worth mentioning that, unlike the Romanian companies, the Spanish companies present in their annual reports a large amount of data and information on intangible capital.

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Measuring Intangible Capital: A Review of Current Practice

Cited by 71 publications

References 53 publications

Intellectual capital disclosure from sell‐side analyst perspective

Intellectual capital disclosure from sell‐side analyst perspective

Intellectual capital reporting by the New Zealand local government sector

Do the Romanian and Spanish Accounting Environments Meet the Challenges Concerning the Acknowledgement of Intangible Elements?

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