Visualising Intangibles: Measuring and Reporting in the Knowledge Economy

a cura di Stefano Zambon e Giuseppe Marzo

pubblicato da Ashgate Publishing Ltd, Aldershot (UK), 2007

Measuring and Reporting on Intangibles and Intellectual Capital

In recent years, one of the most important emerging features of economic systems in organisations, is the role of intangibles in wealth creation, which are for this reason often comprehensively referred to as Intellectual Capital.

Even though intangibles have always been important for running economic activities, they are nowadays at the centre of an ever increasing interest of the scientific community and the practice world. The growing attention on this subject area appears very significant when considering the large number of articles and books published in the last 10 years, as well as the events and projects promoted by many international institutions.

The underlying reason is that intangibles are almost unanimously considered as today’s major value-drivers of firms, industries and regions, and therefore any attempt to measure, analyse and manage them is a crucial effort in the direction of improving value creation at micro, meso and macro.

Despite their accepted relevance, intangibles are still poorly understood and not widely investigated, both by academics and practitioners. What seems to be increasingly recognised is, indeed, the necessity for adopting a completely new approach to the measurement and management of intangibles. Notwithstanding, some steps towards a better visualisation of these resources is required, as a clear knowledge gap continues to exist in this field, necessitating more models, tools and approaches, relevant to the realms of theory and practice.

In this respect, the accounting standards revolution in Europe requiring the adoption of International Accounting Standards (IAS; now, International Financial Reporting Standards, IFRS) has emphasised the measurement and reporting of intangibles, in European companies’ financial statements. IFRS 3 on Business Combinations and IAS 38 on Intangible Assets in particular, are at the centre of a lively debate on the rules to be adopted for improving financial statement information, and their implications for economic decision-making. Moreover, a comparison between IAS/IFRS and the U.S. Financial Accounting Standards (FAS) reveals some differences in the capitalisation and treatment of intangible assets, and potentially a different degree of disclosure. What kind of effect the adoption of new accounting rules can produce on financial statements is of course, a point to be investigated. Moreover, the interest to make financial information available in a widespread and timely manner, and the need for a detailed but rapid benchmarking between financial reports of different companies, calls for new technological tools such as the eXtensible Business Reporting Language (XBRL), which could be usefully applied also, for information on intangibles.

Furthermore, many firms unsatisfied with the current accounting rules, have begun to publish ad hoc intangible reports. Different forms of statements have been used for this purpose in recent years, therefore an analysis of their ability to effectively disclose intangibles to various audiences, appears to be of great interest.

The importance of intangibles is also witnessed by the focus on Knowledge Management in company practices globally. Indeed, how individual knowledge can migrate to an organisational level and how such organisational knowledge can be retained and renewed by firms, are two interesting topics closely related to intangibles. All types of knowledge are, indeed, intangible assets of an organisation, and hence the mounting attention on Knowledge Management is another distinctive way to emphasize the important role of these resources in value creation.

Also policy makers are increasingly recognising the crucial role of intangibles for a competitive advantage of both nations and regions, and are supporting research programmes on the subject. Traditionally, the weight of investments on GNP and the quality level of workforce have been at the centre of policy makers’ decisions. Nowadays, nations and regions are increasingly competitive in the knowledge capital they possess, but economic theory and statistical indicators are still unable to capture value and complexity of intangibles. Thus, the quest for a new approach to measuring, reporting and valuing intangibles is emerging at the meso and macro level

The awareness of the need for new research on intangibles is the fundamental reason that stimulated this book. It derives from a two-year interdisciplinary project, funded by the DG Information and Society Technologies of the European Commission, named PRISM (Policy making, reporting and Measuring, Intangibles, Skills Development, and Management – http://www.euintangibles.net). In particular, the research presented in this book, essentially collects the updated version of the studies developed within the Ferrara University’s research unit, “Accounting, Financial Analysis and Audit in the Intangible Economy” led by Prof. Stefano Zambon. They have now been integrated into this publication, which also includes other works dealing with important topics in the subject area.

Contents of the book

The book offers new insights into the measuring, reporting, management and value of intangibles, and the use of associate information in a variety of contexts and settings, not only linked to profit-making entities and the micro level.

The book analyses:

  • The effect that SFAS 141 and SFAS 142 focusing on the possible effects of the adoption by the International Accounting Standards Board (IASB) of the US rules and on the amount of disclosure released by European companies with reference to the new treatment of goodwill and its component parts.
  • The role of the real options theory in analysing and valuing intangible assets, highlighting the reasons and the breadth of such a use, and using the real options lens for interpreting some characteristics of intangible assets,
  • The evolution of accounting, from the point of the development of Generally Accepted Accounting Principles (GAAP), arguing that especially for the growing significance of intangible assets, GAAP no longer is sufficiently relevant for the financial community.
  • The emergence of an alternative intangibles-oriented form of corporate reporting, i.e. the Intellectual Capital (IC) statement, caused by the inadequacy of the traditional financial statements in addressing the issue of intangibles.
  • The effect of capitalisation and subsequent amortization of R&D expenditures on the improvement of the information conveyed by earnings and equity book value, about intrinsic equity value.
  • The model for measuring the level of disclosure of intangibles developed in 2002 by the University of Ferrara, in collaboration with the Italian Association of Financial Analysts (AIAF), and its application in a European context.
  • The ValueReporter by PricewaterhouseCoopers LLP, and the University of Ferrara disclosure model.
  • The attitude and methodologies of credit rating agencies vis-à-vis intangible assets in their rating process, highlighting that ratings are essentially based on financial data despite the frequent reference to specific intangibles in the manuals and systems of raing agencies.
  • The eXtensible Business Reporting Language (XBRL) with a particular focus on financial reporting.
  • The role of power,exploring some reasons of its importance.
  • The reporting and management of intangible assets in cultural organisations.
  • The policy indicators of intangible assets at macro level, corresponding to four main intangible assets: human capital, innovation and knowledge base, organisational capital and social capital.


Qui sotto potete trovare il file pdf con l'introduzione del libro.

Data pubblicazione: 9/02/2021

Argomento: Capitale intellettuale, Strategia
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