Intellectual Capital Reporting Implementation
Accounting, reporting and management of an organisation’s intellectual capital is a new business trend, brought about by changes in business environment.
As a result of rapid market globalisation, the accumulation, sharing and application of knowledge is becoming the main critical success factor for all businesses and institutions. The importance of material resources, such as real estate, equipment, and raw materials is diminishing, whilst the significance of knowledge, human resources, relationships with clients and partners is rising.
All this influences changes in business management and accounting. Traditional accounting, which is most often based on financial or quantitative accounting, is geared towards only to material resources, which can be expressed in monetary or quantitative measures, accounting. But intangible resources, such as knowledge or employees’ competence, can not be expressed in monetary or any volume, length or weight measures. Today’s businesses need new means that will help account for and manage intangible assets – intellectual capital.