Techniques for measuring intangible capital: a review of current practice

Hunter, L; Webster, E; Wyatt, A

Techniques for measuring intangible capital: a review of current practice

Hunter, L Webster, E Wyatt, A

Permalink

Publisher:: Wiley-Blackwell Publishing Asia
Publication Type:: Journal Article
Citation:: Australian Accounting Review, 2005, 15 (2), pp. 4 - 21
Issue Date:: 2005-01

Closed Access

	Filename	Description	Size
	2007003679OK.pdf		12.73 MB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Hunter, L	en_US
dc.contributor.author	Webster, E	en_US
dc.contributor.author	Wyatt, A	en_US
dc.date.issued	2005-01	en_US
dc.identifier.citation	Australian Accounting Review, 2005, 15 (2), pp. 4 - 21	en_US
dc.identifier.issn	1035-6908	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15800
dc.description.abstract	t is argued that the approaches and unofficial metrics which have been developed to fill the error in the official information systems have limited scope for widespread use. The batteries of intellectual capital (IC) indicators which have been privately proposed make components of IC visible. However, this IC information is not consistent, comprehensive or reliable, nor is it informative about the relative monetary allocations to different categories of IC investments. Further, since it is generally not clear whether these non-financial indictors are reflections of the activity (cost) expended to generate the asset, or represent forward-looking values to the firm, there are no all-purpose ways to use the data analytically. The existing rules seek to minimize Type II errors but overlook the consequent implications for Type I errors. Moreover, given the rising significance of IC in firms over the past half-century, the magnitude of the Type I error is expected to grow. The objective of the accounting decision should be to optimism - that is, minimize combined errors, not a single error. It is fundamental to the economics of the firm that cost-based measures of IC be based on the knowledge of the categories of expenditures dominating the value-creation processes. The rate of return to this investment can only be determined through an analysis involving the original expenditure data. Much of what takes place under existing approaches is concerned with measuring the expected future value of the firm's intermediate output rather than the firm's original monetary allocations to IC investments of different types.	en_US
dc.publisher	Wiley-Blackwell Publishing Asia	en_US
dc.relation.ispartof	Australian Accounting Review	en_US
dc.title	Techniques for measuring intangible capital: a review of current practice	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	15	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1501 Accounting, Auditing And Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/School of Accounting
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.issue	2	en_US
pubs.volume	15	en_US

Abstract:

t is argued that the approaches and unofficial metrics which have been developed to fill the error in the official information systems have limited scope for widespread use. The batteries of intellectual capital (IC) indicators which have been privately proposed make components of IC visible. However, this IC information is not consistent, comprehensive or reliable, nor is it informative about the relative monetary allocations to different categories of IC investments. Further, since it is generally not clear whether these non-financial indictors are reflections of the activity (cost) expended to generate the asset, or represent forward-looking values to the firm, there are no all-purpose ways to use the data analytically. The existing rules seek to minimize Type II errors but overlook the consequent implications for Type I errors. Moreover, given the rising significance of IC in firms over the past half-century, the magnitude of the Type I error is expected to grow. The objective of the accounting decision should be to optimism - that is, minimize combined errors, not a single error. It is fundamental to the economics of the firm that cost-based measures of IC be based on the knowledge of the categories of expenditures dominating the value-creation processes. The rate of return to this investment can only be determined through an analysis involving the original expenditure data. Much of what takes place under existing approaches is concerned with measuring the expected future value of the firm's intermediate output rather than the firm's original monetary allocations to IC investments of different types.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/15800