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Construction and valuation of intellectual capital: a case study

Construction and valuation of intellectual capital: a case study Purpose – The aim of this study is to reflect on how the specific nature of intellectual capital influences the valuation process, in practice, and how it impacts on some of the qualities of its value. Design/methodology/approach – This study is based on a case study (“Ankon”) developed by adopting a modest interventionist approach. Findings – This study highlights the relevance of the intellectual capital valuation process in spite of the intellectual capital value per se . In fact, while intellectual capital value seems to present a limited level of objectivity, consistency, comparability and understandability, its valuation process can be considered an opportunity to visualise and understand intellectual capital and its influence on financial performance. In other words, intellectual capital valuation can be considered as a practice useful to crave the attention of the managers on intellectual capital in action. Research limitations/implications – The main limitations of this study are related to the particular research methodology adopted (action research case study) and to the size of the case investigated. Practical implications – The findings provided by this research should be useful to those interested in studying intellectual capital in action and in developing new valuation models or refining existing models. Finally, considering that some of the limitations of intellectual capital value can be related to the absence of generally accepted valuation guidelines (e.g. the absence of a common definition, a single process, etc.), this can represent an incentive for policy makers to draw up useful rules to make intellectual capital value more understandable for an outsider and to identify managerial best practices. Originality/value – In comparison with previous studies on intellectual capital valuation, this one focuses on an in vivo intellectual capital valuation process. In addition, this research stresses the specificities and criticalities that emerge from a process perspective in which intellectual capital is considered as a conventional object. Moreover, this paper enriches the previous critical discussions on intellectual capital measurement focusing on intellectual capital financial value. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Capital Emerald Publishing

Construction and valuation of intellectual capital: a case study

Journal of Intellectual Capital , Volume 12 (3): 15 – Jul 26, 2011

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1469-1930
DOI
10.1108/14691931111154698
Publisher site
See Article on Publisher Site

Abstract

Purpose – The aim of this study is to reflect on how the specific nature of intellectual capital influences the valuation process, in practice, and how it impacts on some of the qualities of its value. Design/methodology/approach – This study is based on a case study (“Ankon”) developed by adopting a modest interventionist approach. Findings – This study highlights the relevance of the intellectual capital valuation process in spite of the intellectual capital value per se . In fact, while intellectual capital value seems to present a limited level of objectivity, consistency, comparability and understandability, its valuation process can be considered an opportunity to visualise and understand intellectual capital and its influence on financial performance. In other words, intellectual capital valuation can be considered as a practice useful to crave the attention of the managers on intellectual capital in action. Research limitations/implications – The main limitations of this study are related to the particular research methodology adopted (action research case study) and to the size of the case investigated. Practical implications – The findings provided by this research should be useful to those interested in studying intellectual capital in action and in developing new valuation models or refining existing models. Finally, considering that some of the limitations of intellectual capital value can be related to the absence of generally accepted valuation guidelines (e.g. the absence of a common definition, a single process, etc.), this can represent an incentive for policy makers to draw up useful rules to make intellectual capital value more understandable for an outsider and to identify managerial best practices. Originality/value – In comparison with previous studies on intellectual capital valuation, this one focuses on an in vivo intellectual capital valuation process. In addition, this research stresses the specificities and criticalities that emerge from a process perspective in which intellectual capital is considered as a conventional object. Moreover, this paper enriches the previous critical discussions on intellectual capital measurement focusing on intellectual capital financial value.

Journal

Journal of Intellectual CapitalEmerald Publishing

Published: Jul 26, 2011

Keywords: Intellectual capital; Intangible assets; Valuations; Accounting; Measurement; Accounting valuation; Financial performance

References