Problems and resolutions to future knowledge‐based assets reporting
| Pages | 205-215 |
| Published date | 24 April 2007 |
| Date | 24 April 2007 |
| DOI | https://doi.org/10.1108/14691930710742808 |
| Author | Waymond Rodgers |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Problems and resolutions to
future knowledge-based assets
reporting
Waymond Rodgers
A. Gary Anderson Graduate School of Management, University of California,
Riverside, California, USA
Abstract
Purpose – The purpose of this paper is to provide a measurement system of knowledge-based assets
for graduate students, researchers and practitioners which can help them enhance their understanding
of valuation issues.
Design/methodology/approach – Three types of validity are reported to be relevant for the
purposes of understanding knowledge-based assets information systems: criterion validity –
establishment of a statistical relationship with a knowledge-based information system and
productivity; content validity – repr esentation of a specified universe of contents in the
knowledge-based information system; construct validity – measurement of knowledge.
Findings – A framework is provided that helps explain why measurement is important in deciding
characteristics such as information value, cost, reliability, validity, and bias (random and non-random
error) which is germane to the development of an efficient and effective knowledge-based assets
information system.
Practical implications – The paper is a very useful source of information for graduate students,
researchers and practitioners involved with testing, designing, valuing and/or implementing a
knowledge-based information system.
Originality/value – A measurement model is presented that may spark future models that can be
implemented, tested and translated into actions in various organizational settings.
Keywords Intangible assets,Measurement, Financial reporting
Paper type Research paper
In today’s knowledge-based economy, various industries operate without a traditional
capital base, and without traditional tangible assets. Yet these organizations are
increasingly the main contributors of value to the global economy. However, issues
surrounding the measurement, valuation and future use of knowledge-based assets
loom large as we began our trek into the twenty-first millennium. Part of this difficulty
rests with the transition from an industrial era to an information/knowledge era (Blair
and Wallman, 2001; Lev, 2001; Upton, 2001; Tillquist and Rodgers, 2005).
Management and accounting measurement techniques emerged from the factory,
which enabled a more tractable way of identifying, measuring, and valuing labor,
material and overhead inputs to be converted into outputs. The tangible nature of these
items related to a company’s production facilities and its cost were directed to the
balance sheet (unexpired costs) or to the income statement (expired costs). Hence, any
monies or funds absorbed by an organization could be readily “accounted for” and
translated into some value beneficial to primarily creditors and investors dec ision
making processes (Rodgers, 2006). Hence, this mismatch between tangible and
intangible indicators has been ignored since the latter tend to be more difficult to
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Knowledge-
based assets
reporting
205
Journal of Intellectual Capital
Vol. 8 No. 2, 2007
pp. 205-215
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930710742808
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