9. Intellectual Capital Accounting

Lukas Choo
Flashcards by Lukas Choo, updated more than 1 year ago
Lukas Choo
Created by Lukas Choo about 5 years ago
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Masters Management, Control & Finance Flashcards on 9. Intellectual Capital Accounting, created by Lukas Choo on 04/08/2016.

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Intellectual Capital - Explanation • Intellectual material-knowledge, information, intellectual property and experience that can be used to create wealth • The idea is that IC is composed of human capital, structural capital (features that support the company) and relational capital (external stakeholder relations) • The organizational value consists of tangible and intangible assets, which are mostly undocumented in traditional accounting systems
Firm Value - formula • Firm value = Book value (Assets + Liabilities) + intangible assets (IC)
Intellectual Capital - main categories/formula - defining strategy elements for growth • IC = human + structural + relational capital
Human Capital, thinking The cumulative knowledge, skills, and experiences in the organization (Employee qualification and experience, Leadership and social skills, Employee motivation)
Organizational (or structural) Capital, non-thinking Organizational capacities. The embodiment, empowerment and supportive infrastructure of human capital (Corporate culture, Internal co-operation and organization, Product innovation, Process knowledge and optimization, Knowledge transfer and storage (e.g. idea bank))
Relational (or customer) Capital Relations to customers, suppliers and investors, External co-operation and knowledge acquisitions, Social commitment and public relations
What constitutes IC? o Human capital, Skills, know-how, experience & creativity o Intellectual assets, Inventions, Processes, Data, Computer programs o Intellectual property, Patents, copyrights, trademarks, trade secrets, semiconductor marks, Designs, Drawings, Publications
What’s a value model? A value model is a sketch of how value is created and transformed into assets (resources and capabilities)
Human Capital - Definition People’s competencies, skills and capabilities, experience, and motivation to innovate.
Intellectual Capital - Definition Organizational, knowledgebased intangibles, including: intellectual property, “organizational capital” and intangibles associated with brand and reputation.
BSC - Definition from Kaplan & Norton BSC: a performance measuring system to quantify intangible assets, offers a framework for describing strategies for creating value from both tangible and intangible assets.
Strategy Maps - What to measure & manage? 1. Value creation is indirect -Intangible assets (such as knowledge) seldom have direct influence on financial outcomes. 2. Value is contextual -The value of an intangible asset depends on its alignment with the strategy of a company 3. Intangible assets are bundled -Intangibles cannot be isolated from the organizational context
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