Dealing with the management of intellectual capital The potential role of strategic management accounting

• Published in: Accounting, auditing, & accountability Vol. 15; no. 2; pp. 251 - 267
• Main Authors: Tayles, Mike, Bramley, Andrew, Adshead, Neil, Farr, Janet
• Format: Journal Article
• Language: English
• Published: 01-01-2002
• Subjects: Accountability; Accounting; Auditing; Business accounting; Dealing; Human capital; Intellectual capital; Intellectual property; Knowledge base; Management; Markets; Measurement; Profession; Service industry; Strategic management; Strategic planning
• ISSN: 0951-3574
• DOI: 10.1108/09513570210425574

Given the considerable increase in knowledge-based and technology driven companies, the accounting profession has been wrestling with the valuation of intangibles and particularly intellectual capital. This paper is based on our interaction, as a multi-disciplined team, with service businesses and their concern to make visible and hence manageable the value of the intellectual capital of their employees and infrastructure. It is observed that valuation should not be left to the market but that internally the role of strategic management accounting can inform valuation, support decisions and promote competitive advantage. This could be undertaken by reference to strategically driven and formally established performance measures which are incorporated into a proposed valuation model.