Intellectual Capital Accounting Research Articles

Intellectual Capital and Financial Performance of Quoted Manufacturing Firms

Purpose: This study examined the effect of intellectual capital on the financial performance of quoted manufacturing firms on the Nigerian Stock Exchange (NSE). The study specifically evaluated the effect of the value-added intellectual coefficient (VAIC) on Asset Turnover (ATR), Gross Profit Margin (GPM) and Return on Assets (ROA) from 2011 to 2019. Research Methodology: The research design used in the study is ex post facto. Non-probability sampling was the method of sampling that was employed in the investigation. Twenty (20) consumer products manufacturing companies that had been listed on the NSE for nine years made up the final sample. In earlier investigations, this was deemed sufficient for regression analysis. The analysis makes use of secondary data taken from the companies’ annual reports. The information spanned a nine-year span, from 2011 to 2019. Result: There is a non-significant negative effect of value added intellectual coefficient on the Asset Turnover Rate (ATR) of quoted manufacturing firms; however, there is a non-significant positive effect of VAIC on Gross Profit Margin (GPM) and Return on Assets (ROA) of quoted manufacturing firms. Limitation: The main limitation is the duration of time the study was conducted and the delisting of some firms during the period. Contribution: The research adds to the body of knowledge about developing nations, on the nexus of VAIC and financial performance. It reiterates the point that firms should emphasize intellectual capital accounting and disclosure to boost and maintain a motivated workforce and its potentially beneficial effect on firm valuation in this knowledge era.

Reflecting on intellectual capital measurement and management in European universities

Purpose This paper aims to critically review intellectual capital (IC) accounting research and practices in European public universities, specifically in Spain, Austria and Italy. These three countries represent the majority of IC accounting research related to universities. Design/methodology/approach This study critically reviews a selection of university-based IC accounting research, applying Alvesson and Deetz’s (2000) critical perspectives of insight, critique and transformative redefinition. Findings The analysis reveals that European public universities follow the Humboldtian model of higher education, integrating a third mission to society into their traditional roles as teaching and research institutions. This study explored how the emergence of a third mission for the university was conceptualised. This study also provided insights, critique and a transformative redefinition to advance IC as a strategic resource in European public universities. Originality/value The findings provide academics and policymakers with insights, critique and a transformative redefinition of IC as a strategic resource for European public universities to meet future challenges in an ever-changing world.

Changing patterns of business behavior: The Ukrainian experience of adaptation of global accounting and financial mechanisms

In the context of growing turbulence in economic development, it becomes necessary to determine the main patterns of interaction between business and its counterparties. The purpose of this study is to determine behavior patterns - patterns and eliminate existing obstacles to leveling negative phenomena in the economy and finding conditions for meeting business needs, incentives for further development, improving the quality and standard of living, attracting more financial resources, investments to ensure production. The methodological basis of the study was modern regulatory and legislative sources of formation of accounting and financial mechanisms and patterns in business activity. In the conducted researches, methods of dialectics, methods and principles of scientific knowledge. As a result of the study, the possibility of substantiating the patterns of business behavior that form the system of financial, transactional management and strategic accounting of intellectual property and its structural components based on a complex of conceptual approaches is determined: the theory of intellectual capital, intellectual property valuations, accounting and management, the methodology of net intellectual capital accounting. Conclusions are presented by the optimal variant of pattern changes that corresponds to the selected conditions of adaptation of the accounting and financial mechanism to the conditions of business development can be obtained only on the basis of intuitive selection, appropriate traditional methods, algorithms, strategies, which will be the basis of the set goals and tasks related to the nature of doing business.

Intellectual Capital Accounting and Financial Performance of Listed Manufacturing Firms in Nigeria

The study examines the relationship between intellectual capital accounting and financial performance of listed manufacturing firms in Nigeria. The study analyzed intellectual capital accounting in the dimension of human capital efficiency, while financial performance was analyzed with return on capital employed and earnings per share. Ex-post facto research design was adopted for the study. The population of this study was listed manufacturing firms in Nigeria Stock Exchange from 2014 to 2018. The Pearson Product Moment Correlation Coefficient and multivariate regression were used for data analysis and the study concluded that Human capital efficiency significantly relates with return on capital employed and earning per shares of listed manufacturing firms in Nigeria. It was recommended that Nigerian manufacturing firms must develop strategies toadequately invest in different intellectual capital components.

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

This work examined the effect of Intellectual capital accounting on earnings generation of listed deposit money banks in Nigeria. The study adopted the ex-post facto research design and panel regression statistical technique, involving the use of time series and cross-sectional data. Data covered the period of eight-years (2011-2018); considering the total population of fourteen (14) listed commercial banks in Nigeria, random sampling was employed in selecting firms for this study involving eleven (11) listed deposit banks. Data were sourced secondarily from the firms' published annual financial statements. Value Added Intellectual Coefficient (VAIC) theory as developed by Pulic (1998) was adopted for this study. It was discovered from the findings that Intellectual Capital Accounting all have a positive and significant effect on gross earnings. Therefore, Intellectual Capital Accounting have a positive and significant effect on earnings generation of listed deposit money banks in Nigeria. In view of our findings managing directors of listed deposit money banks should carry out a proper implementation and regular monitoring of the systems, procedures and program (structural capital), all with an effective and efficient support from higher and middle line management, as this will ensure expansion in all frontiers of the business.

Accounting at your service: university survival, recovery and revolution from COVID-19

Purpose The purpose of this paper is to discuss the roles of accounting for university survival, recovery and revolution from the COVID-19 pandemic. It constructively critiques the use of compliance and cost-centric accounting to inform crisis response and proposes roles for accounting to better serve decision-making in a crisis. Design/methodology/approach This paper discusses limitations about how accounting information was used in a university’s response to the COVID-19 pandemic. This paper describes potential roles for accounting across crisis phases. These proposals recognise requirements arising from the university’s regulatory environment and apply concepts from intellectual capital accounting and service-dominant logic. Findings This paper proposes that in the survival phase, accounting can mitigate rash responses by clarifying the crisis’s impact and stakeholder alignment. In the recovery phase, accounting can inform resourcing decisions by balancing signals from accounting about staff expense and capital investment. In the revolution phase, accounting helps develop the business models needed to adapt to changing student needs, hybrid teaching delivery and importance of intellectual capital. Research limitations/implications The case study discusses the early stages of a university’s response to the COVID-19 pandemic. It does not provide a comprehensive analysis of success or failure of accounting in a crisis. The case raises directions for accounting to clarify the ambiguities in objectives and cause-and-effect relationships from the pandemic. Practical implications This paper proposes actions for accounting to support the survival, recovery and revolution of the university sector from the pandemic. The actions cover stakeholder engagement, university sector governance and strategic planning. Originality/value This paper proposes a lifecycle of accounting roles at different stages of the COVID-19 response that reflects requirements from the university’s regulatory environment and draws on intellectual capital and service-dominant logic literature.

Increasing productivity and sustainability of corporate performance by using management control systems and intellectual capital accounting approach

The purpose of this article is to provide an overview of the literature covering the area of management control systems (MCS) and intellectual capital accounting approach in logistics and related these concepts to sustainability of corporate performance. Management control system (MCS) is system in companies which gathers and uses information to assess the performance of diverse company resources like human, physical, financial aspects of the companies. The application of a management control system in the field of quality management is found to be useful in explaining what changes are necessary to maintain high quality levels. The other useful method, for assessing the performance of diverse companies' resources like intangible assets is intellectual capital accounting approach. Intellectual capitals are intangible assets that create value for business units and are one of the main factors in creating competitive advantages for companies. Attention and focus on intellectual capitals in organizations and companies are one of the fundamental segments in value chain in the direction of value creation, and measurement and accurate disclosure of intellectual capital make managers and stakeholders successful in conducting the organization. The current study develops necessitates of using these methods for reach to corporate sustainability and sustainable development in companies.

Every Cloud Has a Silver Lining: A History of Barriers to Intellectual Capital Measurement

The purpose of this paper is to contribute to the Intellectual Capital Accounting (ICA) literature by investigating the barriers to IC measurement and how they can (re)shape IC measurement projects. The paper presents an interventionist case study of a company which has been measuring its IC for several years. It focuses on some emblematic situations in which barriers arose during the design and implementation of IC indicators followed by a (re)moulding of the IC measurement project within the organization. The case analysis revealed two barriers: the heavy workload that the design and calculation process of IC indicators entails and the perceived limited reliability of those indicators. These barriers did not lead to a complete failure of the project, but acted as a “filter”, resulting in the discontinued use of those indicators that were not perceived as useful or reliable and in the adoption of those that the managers actually considered useful. While this hindered a complete implementation of the ICMS, it promoted a selection of IC indicators and a legitimation of those that subsequently became part of the management control system. While previous studies explore how barriers can hamper the design as well as the implementation of an ICMS, this paper sheds light on what happens to IC measurement projects when the magnitude of barriers is not so significant as to lead to the complete failure of the project. This offers a new and different view of the barriers related to the adoption of ICMSs. Rather than considering them as factors which can interrupt IC measurement, they could be seen as factors which can challenge the implementation of the ICMS, strengthening those IC indicators that are perceived as reliable and useful and eliminating or disregarding those that did not meet expectations.

Intellectual capital accounting in the age of integrated reporting: a commentary

Purpose The purpose of this paper is to explore the extent to which the practice of integrated reporting (IR) in organisations can be a vehicle for furthering and sustaining the practice of accounting for intellectual capital (IC). It introduces the eight papers forming this Journal’s special issue on “Extending Intellectual Capital through Integrated Reporting” that demonstrate how organisations are developing practices at the nexus of IC and IR. Design/methodology/approach The paper takes the form of a review of the eight papers, and it connects the outcomes from these papers into some future research directions based on an interpretive approach and the authors’ expertise on IC and IR. Findings The papers published in this special issue provide a useful foundation for extending the research project on IR-led IC accounting. However, there is a lack of research in this special issue that goes much beyond third-stage IC research, which is directed at strengthening IC practices inside organisational boundaries. Research limitations/implications This commentary highlights that IR provides many opportunities to reinvigorate the field of IC accounting. Insights provided in this commentary may be relevant to understand and evaluate future iterations of IC accounting. Practical implications While it is essential to understand how IR works in practice moving beyond organisational boundaries it is even more critical if companies are to survive and thrive in an increasingly turbulent business operating environment. Thus, this commentary offers arguments as to how IC and IR research can extend into fourth and fifth stage research paradigms. Originality/value This commentary places the eight papers published in the Journal’s special issue on “Extending Intellectual Capital through Integrated Reporting” within the context of IC accounting to explain the trajectory of research that connects IC and IR and reveals gaps in this field of research.

The fall and rise of intellectual capital accounting: new prospects from the Big Data revolution

PurposeAs Big Data is creating new underpinnings for organisations’ intellectual capital (IC) and knowledge management, this paper aims to analyse the implications of Big Data for IC accounting to provide new conceptual and practical insights about the future of IC accounting.Design/methodology/approachBased on a conceptual framework informed by decision science theory, the authors explain the factors supporting Big Data’s value and review the academic literature and practical evidence to analyse the implications of Big Data for IC accounting.FindingsIn reflecting on Big Data’s ability to supply a new value for IC and its implications for IC accounting, the authors conclude that Big Data represents a new IC asset, and this represents a rationale for a renewed wave of interest in IC accounting. IC accounting can contribute to understand the determinants of Big Data’s value, such as data quality, security and privacy issues, data visualisation and users’ interaction. In doing so, IC measurement, reporting and auditing need to keep focusing on how human capital and organisational and technical processes (structural capital) can unlock or even obstruct Big Data’s value for IC.Research limitations/implicationsThe topic of Big Data in IC and accounting research is in its infancy; therefore, this paper acts at a normative level. While this represents a research limitation of the study, it is also a call for future empirical studies.Practical implicationsOnce again, practitioners and researchers need to face the challenge of avoiding the trap of IC accountingisation to make IC accounting relevant for the Big Data revolution. Within the euphoric and utopian views of the Big Data revolution, this paper contributes to enriching awareness about the practical factors underpinning Big Data’s value for IC and foster the cognitive and behavioural dynamic between data, IC information and user interaction.Social implicationsThe paper is relevant to prepares, users and auditors of financial statements.Originality/valueThis paper aims to instill a novel debate on Big Data into IC accounting research by providing new avenues for future research.

Overcoming the symbolic violence of orthodox accounting practice: an intellectual capital perspective

PurposeWhile intellectual capital (IC) accounting research has concentrated on private enterprise, it is also germane to the public sector given pressures to create government business enterprises. However, despite the impetus for change, IC accounting is not a widespread practice in any sector. To understand the paradox, the purpose of this paper is to present a longitudinal narrative of IC accounting practice at an Australian public sector organisation.Design/methodology/approachBourdieu’s theory of practice is adopted in a single longitudinal case study to examine orthodox and heterodox accounting processes along with the resultant “field of opinion” created by IC discourse.FindingsFor an innovation such as IC accounting to be utilised, the social capital associated with it must be able to overcome the symbolic violence of orthodox financial accounting practices. In essence, IC exists alongside accounting and does not replace it. However, not all actors learn about and adopt IC in the same way. Therefore, organisations cannot learn if the actors themselves cannot see how IC should not replace accounting but exists alongside it.Practical implicationsOn reflection, the study supports a conclusion that IC should not be viewed as a heretical accounting practice. Rather, it serves discrete purposes that can be utilised by academics and practitioners to achieve particular ends rather than viewed as an alternative form of accounting.Originality/valueWith increasing awareness of accounting of the importance of intangible resources in the “new economy”, this study emphasises the teleological aims of IC as a complementary accounting technology.

ОЦІНКА ІНТЕЛЕКТУАЛЬНОГО КАПІТАЛУ З ПОЗИЦІЙ БУХГАЛТЕРСЬКОГО ОБЛІКУ

The steady functioning of the post-industrial type enterprise and its development as a complex dynamic system requires the use of decision-making processes of general or result indicators, an important place among which is data on intangible economic resources and their productive energy, expressed by indicators of the size and structure of intellectual capital. In the conditions of the post-industrial socio-economic environment, information and intellectual economic resources have a significant effect on the efficiency of the activity of both an individual economic entity and the national economy as a whole. One of the options for developing (improving) the intellectual capital accounting system is the accounting model - Accounting for the future (Accounting for the future‖ (AFTF)). This model is developed as a special tool for the formation of accounting financial reporting on the cost of an enterprise based on the use of technology budgeting capital of the enterprise. The Value Added Intellectual Impact Value (VAIC) model is a system of indicators to measure the value added generated by the enterprise's intellectual capital. The basis of the development of this model is the hypothesis that value added is the main indicator of the transformation of intangible assets into market assets of the enterprise. Existing standardization of accounting and reporting and standards for measuring intangible assets for financial reporting purposes do not provide a formalized value for a significant part of such objects. The lack of a valuation technique does not make it possible to uniquely identify the place of this type of economic resources in the accounting process, to formally represent them in the public reporting of the enterprise, first of all, to include them in the balance sheet for balancing the market and book value of the company. The use of intellectual capital by economic systems of any hierarchical level is a prerequisite for the implementation of the strategy of their innovation development, the formation of investment attractiveness and the provision of positions in the capital markets. The main complex criterion for assessing the modern economic entity is the value of equity, changes in its market value. Taking into account the fact that intellectual capital occupies a significant share in the total value of the equity capital of a post-industrial type enterprise, the development of a reliable methodology for its valuation and the principles of representation in capital and investment markets is an actual subject of modern economic science. The development of the underlying foundations for formalizing the indicators on the intellectual capital of an enterprise, obviously, should proceed from the principle that intellectual assets are intellectual capital that is fixed, stored, cataloged and accessible for familiarization.

Podmiotowość człowieka w gospodarce opartej na wiedzy a rachunkowość kapitału intelektualnego

The article presents the problem of objectification of human labor in the traditional capitalist economy. It pointed out the main reasons for this phenomenon. These are mainly: (1) materialist philosophy and its characteristic conceptual apparatus, (2) traditional theory of financial accounting focused on financial capital. Article makes explicit reference to Christian ethics – the encyclical Laborem Exercens, On Human Work – looking at the axiological support to overcome the tension between labor and capital in the enterprise. This conflict can not be overcome by referring to the economic information drawn from traditional accounting and reporting. It is therefore necessary scientific exploration of alternative accounting concepts taking into account the development of the knowledge-based economy. One such concept is intellectual capital accounting.

Wizja "czwartej drogi" - czy serwisy społecznościowe i rachunkowość kapitału intelektualnego zrewolucjonizują gospodarkę?

Wizja "czwartej drogi" - czy serwisy społecznościowe i rachunkowość kapitału intelektualnego zrewolucjonizują gospodarkę?

Unlocking intellectual capital

Purpose– The intellectual capital (IC) literature argues that introducing the IC concept into a company focusing on measuring can be detrimental and lead to IC “accountingisation”. Using Chaminade and Roberts’ (2003, p. 747) concept of IC accounting “lock-in”, the paper asks “is it possible for an organisation initially to implement and “lock-in” IC accounting practices and subsequently “un-lock” IC through a more strategic managerial approach?” The authors also investigate if and how, after IC has been “un-locked”, can a new IC “locking-in” process occur? The paper aims to discuss these issues.Design/methodology/approach– The authors present an interpretive case study of implementing a system for measuring and reporting IC in an Italian public sector utility company. The analysis uses Actor-Network Theory (ANT) to analyse data and discuss findings which is an appropriate theory for case studies using an interpretive approach.Findings– The findings are contrary to Chaminade and Roberts (2003, p. 733) because the authors challenge the notion “that a dominant accounting perspective can lead to an excessive focus on measurement issues and little attention to management processes”. The evidence from the case study shows how at times a dominant focus on accounting for IC is necessary, especially to allow newcomers to take stock, and make sense, of IC. The analogy is much like comparing accounting vs managing IC to the concept of the chicken and the egg: what comes first?Research limitations/implications– Because the study looks at IC over time, it allows the authors to develop different insights into IC “because IC is not an event, but a journey” (Dumayet al., 2015). Thus, the critique of Chaminade and Roberts (2003) and other IC research based on a short time period is that it does not allow researchers to fully follow the IC’s impact on an organisation. Additionally, the authors also highlight the role academic researchers can play in understanding how IC works inside organisations, especially when the authors examine how deeply (or not) a researcher intervenes in implementing solutions (see Dumay, 2010).Practical implications– The research exemplifies how IC can make a difference for public sector organisations because there is a need for studies such as the authors which exemplify how to introduce the IC concept into public sector organisations and at what point should the IC concept “enter” the organisation (see also Secundoet al., 2015). Doing so re-emphasises that IC is not an ostensive concept. Rather, “IC is part of a configuration of knowledge management and actively mobilised to condition effects” (Mouritsen, 2006) and to make a difference (Tull and Dumay, 2007).Originality/value– This paper is a must read for academics and practitioners seeking to understand how to introduce the IC concept into an organisation.

Forty-two

This article explores the meaning and context of intellectual capital (IC) numbers to help break free from the domination of IC “accountingisation” . Offering a personal and reflective narrative about IC numbers, I first discuss what numbers mean by exploring the way we think about the number 42. This discussion is followed by two empirical sections examining the meaning and context of a common IC measure, employee turnover rates. Measuring any IC element is problematic from an IC accounting perspective because of the unique context in which each organization operates. The comparability of a number from one organization and one period with another is nearly impossible. The article is original because it takes a thought-provoking narrative journey into the use and meaning of applying IC numbers. It is a personal reflection on the implications of considering the meaning of numbers for IC practice, IC education and research, and IC’s future. It is particularly topical in light of the inclusion of IC in the recent Integrated Reporting (<IR>) Guidelines.

Intellectual Capital and Management Accounting Practices: Evidence from Iran

Abstract The purpose of this paper is to propose a framework to investigate the association between the level intellectual capital (IC) and management accounting practices (MAPs) within the Iranian public listed companies. In particular, it aims to examine whether companies with higher level of IC are more likely to place importance on more contemporary management accounting (MA) approaches. The premise of “fit as mediation” of contingency theory is borrowed to explore the potential association between the level of IC and the use of specific MA perspectives in terms of performance measurement and budgetary control techniques. This model brings more useful insight in linking IC to MAPs and those techniques which tend towards strategic-oriented approaches within Iranian context, thereby suggesting that some evolution in MAPs stems from focusing too intently on IC and intangibles. The Iranian public listed companies from Tehran Stock Exchange (TSE) are selected as the ideal setting to examine the relationship between IC and MAPs since most of them are medium to large-sized companies that plausibly enjoy greater resource available for investment in knowledge-based resources and also actively engaged in more innovative and strategic MAPs. This study provides insights into the way practitioners and organizations adopt appropriate MA approaches, to be aligned with the level of IC in a company, with the ultimate purpose of taking full advantage of those knowledge related resources.

Intellectual capital accounting in action: enhancing learning through interventionist research

PurposeThe aim of this paper is to contribute to understanding how measuring intellectual capital (IC) can favor IC mobilization, examining the role of actors who design and implement the system in influencing managers’ IC learning processes and their take up of IC management practices.Design/methodology/approachA constructive case study, in which the researcher was directly involved in measuring IC, is presented. Kolb's experiential learning theory model examines if and how the actors mobilized IC and how the researcher and controller influenced their learning process.FindingsThe paper shows that actors must complete an experiential learning cycle to mobilize IC. The controller's role is pivotal in promoting IC mobilization, provided he/she experiences a deep learning process and he/she moves from “IC counting” to “IC accounting.” The paper also highlights how research intervention contributes to IC mobilization by influencing the actors’ learning process.Research limitations/implicationsThe paper is limited to one Italian company, so the results cannot be generalized; they were influenced by the researcher's “strong” interventionist approach and by the model adopted.Practical implicationsCompanies introducing IC will become aware of barriers and levers to measuring and mobilizing IC, thus enabling them to devise strategies to avoid the former and take advantage of the latter.Originality/valueThe experiential learning theory model offers an alternative way of understanding how IC measurement produces effects and how the controller and researcher can influence the managers’ IC learning journey thus contributing to mobilization of IC.