Intellectual Capital Reporting at the Crossroads

Paradigm, January, 2008, Volume 12, Issue 1, pp. 64-76

21 Pages Posted: 15 Dec 2015

Date Written: 2008

Abstract

Intellectual Capital (IC) is an important value driver in today's organizations. Although, IC reporting is receiving increasing attention from accountants in recent years, the innovativeness of the concept makes IC not fully incorporated in financial accounting reports as yet. At present, disclosure of IC-related information by companies is done on a voluntary basis, as applicable accounting regulations dictate the definition of a balance sheet and the assets to be included therein. Omission of IC-related information may adversely influence the decisions made by shareholders or lead to material misstatements. Only when companies would provide IC statements on a large scale, we would be able to speak of a true reporting revolution in company valuation, both in theory and practice. This paper attempts to review some prominent internal and external measurement methods of IC.

There is a tremendous need for homogenization in the field of KM and IC. A solid theoretical base should be achieved in order to advance in the field, and future research should focus on the development of IC guidelines as well as their international harmonization. Additionally, researchers should analyze IC reports from pioneer firms from around the world to gather the best learning experiences. With this international insight, firms could be advised on how to introduce a new dimension in transparency that will strengthen its organizational governance. After more than a decade, the IC movement is still growing and more and more organizations are recognizing IC as the essence of business navigation.

Keywords: Intellectual Capital (IC), financial accounting, company valuation, international harmonization

Suggested Citation

Bhasin, Madan Lal, Intellectual Capital Reporting at the Crossroads (2008). Paradigm, January, 2008, Volume 12, Issue 1, pp. 64-76, Available at SSRN: https://ssrn.com/abstract=2703644

Madan Lal Bhasin (Contact Author)

Universiti Utara Malaysia ( email )

Sintok, Kedah Darul Aman 06010
Malaysia
01114567247 (Phone)

HOME PAGE: http://www.uum.edu.my

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
48
Abstract Views
1,063
PlumX Metrics