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Accounting for intellectual capital: Evidence from listed English football clubs

Accounting for intellectual capital: Evidence from listed English football clubs In recent years there has been increasing focus on the importance of intellectual capital disclosure. The major resources of the football industry are human ‐ the players (as well as coaches and management) and supporters, yet the traditional accounting framework is largely ineffective in capturing these ‘hidden’ values. This paper reviews research on the quality and extent to which 19 listed professional English football clubs are reporting intellectual capital in their annual reports for the 2002 period. A disclosure index was developed and applied, giving scores for categories of disclosure and for the football clubs. The research findings suggest that components of intellectual capital were poorly reported by listed professional football clubs. External capital reporting was the highest scoring category, followed by human capital. However internal capital reporting scored the lowest. The research findings indicated a positive significant correlation between the size of clubs, club performance and their overall intellectual capital disclosure, in line with previous research in different industries. In conclusion, the importance of intellectual capital is recognized in the football industry as evidenced by the quality and quantity of IC disclosure by some clubs. However, the variability in reporting of different components of intellectual capital suggests that there is considerable room for improvement if the key resources of the football industry are to be truly reflected in the accounting system. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Accounting Research Emerald Publishing

Accounting for intellectual capital: Evidence from listed English football clubs

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References (31)

Publisher
Emerald Publishing
Copyright
Copyright © 2005 Emerald Group Publishing Limited. All rights reserved.
ISSN
0967-5426
DOI
10.1108/96754260580001042
Publisher site
See Article on Publisher Site

Abstract

In recent years there has been increasing focus on the importance of intellectual capital disclosure. The major resources of the football industry are human ‐ the players (as well as coaches and management) and supporters, yet the traditional accounting framework is largely ineffective in capturing these ‘hidden’ values. This paper reviews research on the quality and extent to which 19 listed professional English football clubs are reporting intellectual capital in their annual reports for the 2002 period. A disclosure index was developed and applied, giving scores for categories of disclosure and for the football clubs. The research findings suggest that components of intellectual capital were poorly reported by listed professional football clubs. External capital reporting was the highest scoring category, followed by human capital. However internal capital reporting scored the lowest. The research findings indicated a positive significant correlation between the size of clubs, club performance and their overall intellectual capital disclosure, in line with previous research in different industries. In conclusion, the importance of intellectual capital is recognized in the football industry as evidenced by the quality and quantity of IC disclosure by some clubs. However, the variability in reporting of different components of intellectual capital suggests that there is considerable room for improvement if the key resources of the football industry are to be truly reflected in the accounting system.

Journal

Journal of Applied Accounting Research – Emerald Publishing

Published: Jun 1, 2005

Keywords: Sport; Capital reporting; Intellectual capital; Disclosure

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