Recognizing Intellectual Capital As An Asset

The revised definition of an asset by the FASB and GASB gives way to the recognition of the fair value of another off-balance sheet value. Interest in recognizing intellectual capital as an asset of the organization has grown out of dissatisfaction with traditional financial accounting and reporting...

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Bibliographic Details
Published in:Journal of business & economics research (Littleton, Colo.) Colo.), 2014-03, Vol.12 (2), p.177
Main Authors: Fischer, Mary, Marsh, Treba
Format: Article
Language:English
Subjects:
Accounting
Balance sheets
Employees
Fair value
Financial reporting
Goodwill
Human resources
Intangible assets
Intellectual capital
Knowledge management
Measurement techniques
Studies
Valuation
Workforce
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Summary:The revised definition of an asset by the FASB and GASB gives way to the recognition of the fair value of another off-balance sheet value. Interest in recognizing intellectual capital as an asset of the organization has grown out of dissatisfaction with traditional financial accounting and reporting directed toward manufacturing, trading of goods, and service activities which ignore the organizational asset values based on knowledge, expertise and technology. The growing interest in intellectual capital (IC) and knowledge management reflects an awareness of the need for identification, utilization, and measurement of an organizations most valuable asset. This paper identifies the importance of the IC value, discusses the research emphasis placed on it by others, and develops a fair value measurement model. The model provides a basis not only for identifying crucial aspects of effective knowledge management, but also for emphasizing the interdependence, and the synergy that may be created through recognition. Measurement techniques are presented together with a process for stakeholder communication that establishes the groundwork for future empirical investigation and analysis.
ISSN:1542-4448
2157-8893
DOI:10.19030/jber.v12i2.8533