The term Intellectual capital collectively refers to all resources that determine the value and the competitiveness of an enterprise. As such, it includes as subsets the attributes that concur to building all financial statements as well as the balance sheet. [1] [2] [3].

Contents

Intangibles

The value of an enterprise is made of physical assets In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simplistically stated, assets represent ownership of value that can be converted into cash . The balance sheet of a firm, various financial assets and, finally, intangible assets, i.e., intellectual capital (IC).[4]

The intangibleness refers to the fact that IC is not easily translatable in financial terms. All other assets of a company, such as a piece of real estate or a credit note, can be monetized: i.e., there exist standard criteria for expressing their value in currency. IC, instead, is mainly made of elements (such as the quality of employees or the reputation of a brand among consumers) for which there is no consensual model for monetary expression.

A more precise name for IC would therefore be "non-financial assets".

Elements of Intellectual Capital

In all definitions of IC, the following taxonomy can be recognized:

  • Relational capital: All relations a company entertains with external subjects, such as suppliers, partners, clients (brands, ...), research centres, etc.;
  • Human capital: The sum total of the useful knowledge of your employees and your customers[5] with more emphasis on knowledge and competences residing with the company's employees;
  • Organizational capital: Collective know-how, beyond the capabilities of individual employees. E.g.: information systems; policies; intellectual property.

References

  1. ^ Patrick H. Sullivan (2000); "Value-driven Intellectual Capital" Wiley
  2. ^ Thomas A. Stewart (1997) "Intellectual Capital - The New Wealth of Organizations
  3. ^ Karl Erik Sveiby (1997) "The Intangible Asset Monitor", J. of Human Resource Casting and Accounting, 2(1)
  4. ^ Paolo Magrassi (2002) "A Taxonomy of Intellectual Capital", Research Note COM-17-1985, Gartner
  5. ^ Horton, Thomas R. The CEO Paradox: The Privilege and Accountability of Leadership. Copyright 1992 Thomas R. Horton. New York, NY 10020.

External links

Categories: Capital This category is about the economic concept of capital; for capital cities, see Category:Capitals; other uses, see Capital | Intellectual property law Categories: Civil law | Property | Intellectual works | Financial accounting

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