A Review of Intellectual Capital Literature Proposing Balance Sheet Disclosures of Intellectual Capital (Plus Evaluative Commentary from a Financial Accounting Measurement Perspective).
Keywords:
Intellectual capital, Balance sheet disclosure, disclosure, financial reporting, total firm valueAbstract
A growing body of academic and popular literature calls for fuller balance sheet reporting of intellectual assets (also known as intellectual capital) in order to provide users of financial statements more complete explanations of total firm value. The purpose of this paper is threefold. First, we review intellectual capital literarure calling for broader measurement and reporting of intellectual assets on the balance sheet. Second, we review financial measurement theory as it pertains to defining assets and measuring assets. Third, we provide a commentary (from a financial accounting measurement perspective) concerning the various proposals from intellectual capital literature suggesting ways to more fully measure and report intellectual assets on the balance sheet. We conclude that intractable measurement difficulties preclude any but spurious measures for most items of internally generated intellectual capital on the balance sheet. Therfore we are against these measurements.
more fully measure and report intellectual assets on the balance sheet. We conclude that intractable measurement
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balance sheet. Therefore we are against these measurements
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