Construction and valuation of intellectual capital: a case study

Published date26 July 2011
DOIhttps://doi.org/10.1108/14691931111154698
Date26 July 2011
Pages377-391
AuthorMarco Giuliani,Stefano Marasca
Subject MatterAccounting & finance,HR & organizational behaviour,Information & knowledge management
Construction and valuation of
intellectual capital: a case study
Marco Giuliani and Stefano Marasca
Department of Management, University of the Marche, Ancona, Italy
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 researchshould 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 limitationsof intellectual capital valuecan 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
intellectualcapital value more understandable for an outsiderand 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.
Keywords Intellectualcapital, Intangible assets, Valuations, Accounting, Measurement,
Accounting valuation,Financial performance
Paper type Case study
1. Introduction
Some would argue that intangibles constitute an ongoing challenge for accountants
(Roslender and Fincham, 2001). In this context, some have shifted their attention from
single intangibles, such as brand, human resources, patents, etc., to a system of
intangibles called “intellectual capital” (IC). This has had an impact also on valuation
practices. While the valuation of single intangibles can refer to some national or
international accounting principles and to several well known and applied valuation
models (e.g. brand equity, human resource costing and accounting, etc.), the valuation
of IC is still problematic, probably because of the specific nature of IC (Gro
¨jer, 2001;
Mouritsen, 2006) or for lack of in-depth studies useful to achieving a deeper
understanding of the IC concept, methods and tools (Andriessen, 2004; Kaufmann and
Schneider, 2004; Seetharaman et al., 2002).
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Construction and
valuation of IC
377
Journal of Intellectual Capital
Vol. 12 No. 3, 2011
pp. 377-391
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691931111154698

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