Question

Design an interview schedule to assess the intellectual capital as perceived by employees is an organization-the demensions and elements for which you had earlier developed.

Answer 1

Answer:

The topic of intellectual capital and its relationship with accounting practice has rapidly given rise to an

extensive and insightful theoretical literature. In this chapter the main elements of the conceptual framework

that connects intellectual capital and business reporting, and thereby underpins the present study, are briefly

outlined. Initially a number of definitions of intellectual capital are identified, and then linked with the

hidden value problem to which intellectual capital accounting was originally developed as a response. In the

third section, value realisation and value creation as competing foundations for accounting and reporting are

explored. Following this, the relationship between the overlapping concepts of intellectual capital, intangibles

and intangible assets is considered. In the final section intellectual capital is compared with human capital,

arguably its most important constituent.

Defining intellectual capital

The Skandia Value Scheme

The founding definition of intellectual capital embraced by Skandia AFS, the birthplace of intellectual

capital accounting, was:

The possession of knowledge, applied experience, organisational technology, customer relationships, and professional

skills that provides Skandia AFS with a competitive edge in the market. (Edvinsson, 1997, p.368)

Over time at Skandia, a “simplified” definition emerged that focused on two components: human capital

and structural capital. Intellectual capital was viewed as human capital together with “those dimensions beyond

the human capital [that] were left behind when the staff went home”, structural capital having grown out of

human capital. The Skandia Value Scheme (Figure 2.1) captures the varied constitution of intellectual capital,

with structural capital initially being sub-divided into customer and organisational capital, which in turn sub-

divides into innovation and process capital, with the former being constituted by intellectual property and

intangible assets.