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

Pages2-10
DOIhttps://doi.org/10.1108/JIC-01-2019-223
Published date11 February 2019
Date11 February 2019
AuthorSubhash Abhayawansa,James Guthrie,Cristiana Bernardi
Subject MatterBehavioural accounting,Organizational structure/dynamics,Knowledge management,Hr & organizational behaviour
Guest editorial
1. Intellectual capital accounting in the age of integrated reporting:
a commentary
Introduction
Integrated reporting (IR) is gaining popularity among organisations globally. Within just
six years since the release of the first international guideline for IR entitled Towards
integrated reporting communicating value in the 21st centuryin 2011, the number of
integrated reporters has surpassed published intellectual capital (IC) reports.
The International Integrated Reporting Council (IIRC) claims that more than 1,000
businesses worldwide have prepared a form of integrated report (IIRC, 2016). As of March
2017, the IIRC lists 477 organisations whose reports refer to the IIRC or the International
Integrated Reporting Framework (hereafter International IR Framework). The IIRC and its
supporters predict that IR represents the future of corporate reporting and will become the
corporate reporting norm(IIRC, 2013, p. 2).
Coinciding with the emergence of IR, there has been a demise of IC reporting in the form
of IC statements. Skandia AFS published the worlds first IC statement in 1995. Since then,
organisations in several countries have experimented with IC statements, supported by the
initiatives of governments in a range of countries, as well as supranational organisations.
One of the most influential projects that supported organisations to measure, manage and
report IC was the Danish Guideline Project for IC reporting. This project resulted in the
publication of guidelines for preparing and analysing IC statements (DATI, 2000; DMSTI,
2003; Mouritsen et al., 2003) and, as a consequence, about 100 organisations prepared IC
statements. However, after less than a decade since the termination of the Danish Guideline
Project, none of those organisations is publishing IC statements (Nielsen et al., 2017). It is
now difficult to find a single listed company anywhere in the world still preparing an
external IC statement (Dumay, 2016).
Although IC reporting in the form of IC statements has become virtually non-existent, it
has partly reincarnated in the form of the emerging IR movement. An integrated report aims
to explain the potential value creation story of a company and, in doing so, grounds itself in
a multi-capital system where IC is significant (IIRC, 2013). According to the International IR
Framework issued by the IIRC (2013), human, relational and structural capitals, which are
considered as the main components of IC (Guthrie et al., 2006), represent three out of the six
capitals an organisation should provide insight about in its integrated report. These capitals
are in the International IR Framework, forming the salient concepts of IR (IIRC, 2013).
Thus, in the age of IR, IC accounting is being revived.
One might question the motivation for examining IR from an IC perspective, invoking
Darwinism to argue that the extinction of the practice of IC statements is evidence that IC
accounting is not fit for purpose. However, it can be counter-argued that the resurrection of IC
accounting in the International IR Framework testifies to its ability to adapt to changing
circumstances and institutional logics. Hence, the relevant question is not whether IC accounting
is essential but, instead, whether its newest embodiment is likely to extend the agenda for IC
accounting. Such is the motivation for this commentary and the Journal of Intellectual Capital
(JIC) special issue on Extending Intellectual Capital through Integrated Reporting.
Some scholars argue that IR is doomed to fail (see, e.g. Dumay, 2016; Flower, 2015). The
debate about success or failure of IR is pertinent to the questions explored in this JIC special
issue, but it is not the authorsintention to engage in this debate because the special issue
seeks to understandthe role IC plays in IR, regardlessof its future. To understand thecritical
Journal of Intellectual Capital
Vol. 20 No. 1, 2019
pp. 2-10
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-01-2019-223
2
JIC
20,1

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