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The collapse of Enron and the role of intellectual capital

The collapse of Enron and the role of intellectual capital The collapse of Enron was almost entirely unexpected and shockingly rapid. While the major cause of this and other mega meltdowns has been determined to be financial manipulation and questionable accounting practices, the fall of these organizations has also raised questions about whether, and to what extent, their intellectual capital/intangible asset intensive business models contributed to their failure. This paper examines three core issues affecting the role of intellectual capital that have been highlighted by Enron's business failure: the linked issues of the effect of moving from a more traditional trading model to an intangible intensive trading model and the requirements for a viable intellectual capital/intangibles business model; changes in the accounting framework to ensure the integrity of an intellectual capital/intangibles‐based organization; and the implications of the Financial Accounting Standards Board (FASB) mandated changes in measuring and managing for goodwill and intangibles http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Capital Emerald Publishing

The collapse of Enron and the role of intellectual capital

Journal of Intellectual Capital , Volume 4 (2): 17 – Jun 1, 2003

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Publisher
Emerald Publishing
Copyright
Copyright © 2003 MCB UP Ltd. All rights reserved.
ISSN
1469-1930
DOI
10.1108/14691930310472767
Publisher site
See Article on Publisher Site

Abstract

The collapse of Enron was almost entirely unexpected and shockingly rapid. While the major cause of this and other mega meltdowns has been determined to be financial manipulation and questionable accounting practices, the fall of these organizations has also raised questions about whether, and to what extent, their intellectual capital/intangible asset intensive business models contributed to their failure. This paper examines three core issues affecting the role of intellectual capital that have been highlighted by Enron's business failure: the linked issues of the effect of moving from a more traditional trading model to an intangible intensive trading model and the requirements for a viable intellectual capital/intangibles business model; changes in the accounting framework to ensure the integrity of an intellectual capital/intangibles‐based organization; and the implications of the Financial Accounting Standards Board (FASB) mandated changes in measuring and managing for goodwill and intangibles

Journal

Journal of Intellectual CapitalEmerald Publishing

Published: Jun 1, 2003

Keywords: Intellectual capital; Intangible assets; Financial Accounting Standards Board; Goodwill

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