Intellectual Capital: A Balance Sheet Asset? (A Measurement Perspective)

Abstract

Should financial measures of intellectual capital be placed on the balance sheet? If so how will intellectual capital be measured, and how will its inclusion on the balance sheet improve financial division-making? We examine, from a financial measurement perspective, a growing body of intellectual capital research calling for inclusion of intellectual assets on the balance sheet, and conclude the proposals are naïve in terms of accounting measurement realities, and confused in terms of purposes severed. Attempting to include dollar measures of intellectual capital on the balance sheet, from an accounting measurement perspective, is unworkable and will not accomplish what intellectual capital researchers believe it will.