Intellectual capital accounting: an alignment between the motive and the accounting approach

Abstract

Purpose – The purpose of the paper is to reflect upon applicability of different intellectual capital (IC) accounting techniques with considerations of accounting motives. This has been achieved by comparing major foci and measurement issues related to two generic accounting motives, namely internal management and external reporting.Design/methodology/approach – This paper is based on the taxonomy of accounting approaches reported by Fincham and Roslender and is an appreciation of the importance of this taxonomy in the field of IC accounting, as well as an illustration of how the organization decides on applicable accounting approaches.Findings – The paper concludes that there is no universally applicable accounting technique or approach. For internal management, the scorecard and narrative approaches help generate actionable plans, whereas the hard valuation and scorecard approaches help generate comparable and methodologically reliable reports for external reporting.Originality/value – The paper contrib...