The Measurement and Recognition of Intellectual Capital in the Process of Accounting Convergence Trends and Patterns

The Measurement and Recognition of Intellectual Capital in the Process of Accounting Convergence Trends and Patterns

Ionica Oncioiu (Titu Maiorescu University, Romania)
Copyright: © 2018 |Pages: 10
DOI: 10.4018/978-1-5225-2255-3.ch492
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Abstract

The value of intellectual capital has been the main focus in the debates between international professionals and business world for many decades. Today, this concept interferes with the international process of assessment, but also with the convergence of accounting. However, it is more likely for a certain period of time to develop both paradigms in parallel and then become convergent, thus solving the paradox of intangible asset valuation. Another challenge would be to extend and adapt this research to the specifics of different national economic systems, to generalize the relationship between intellectual capital and company performance and other countries and industries. This chapter analyses the answer of the questions regarding recogmition, presentation and evaluation of intellectual capital, and also various controversial issues of this concept, as it is presented in the current project of the IASB and FASB.
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Background

In recent decades there was an idea almost unanimous on the growing importance of intellectual capital. It is said more often today „intellectual capital is the engine of the new economy” or „knowledge and information” is the most valuable commodity. The new economy is recognized as an economy in which companies value lies in the knowledge and skills of managers / employees rather than tangible assets value.

Also, many economists have stressed the importance of intellectual capital as a production factor in comparison with traditional assets. There are two theories on economic growth: the theory of neo-classical growth theory exogenous and endogenous growth. Intangibles reflect different endogenous model.

According to endogenous growth model of production is defined as a function dependent accumulation of immaterial (intangible). Over time, permanent growth is possible only if the intangible capital stock changes virtually forever.

Management problem that intangible asset is not new, and the problem of „intellectual capital” is the last line developed in knowledge management.

The Norwegian Government has funded a research project to develop a model of skill capital of the company, he was later involved in an ISO-type certification process that included intellectual capital.

In all these experimental projects prevailing spirit of participation rather than a theoretical development, but current area of interest in intellectual capital research includes: the creation and management of intellectual capital, understanding how best to measure intellectual capital.

Key Terms in this Chapter

Valuation: The process of determining the value of an asset.

Intangible: Represent immaterial assets.

Assets: As future economic benefits controlled by a particular business entity and also as economic resources which are owned by a business.

Estimate: Opinion regarding the value.

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