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The Analyst Magazine:
Intellectual Capital :Challenges in reporting
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While financial accounting can accurately measure, verify and attest a company's ability to manage tangible assets and financial capital, this capability diminishes as the proportion of intangible assets in a company increases.

Skandia is one of the pioneering companies to develop new forms of communicating its stewardship of the intangible resources it uses to create long-term financial success. These resources are its relationship with its partners, the trust of its customers, the knowledge of its staff and the processes it uses to create innovative products and services while delivering high-quality services.

While financial accounting can accurately measure, verify and attest a company's ability to manage tangible assets and financial capital, this capability diminishes as the proportion of intangible assets in a company increases. For companies, like Skandia, where the main drivers of production are intangible, this causes a problem for analysts to accurately understand how well a firm is managing its assets an its potential to increase these assets and create long-term value.

 
 

financial, intellectual, capital, intangible, assets, company, monetary, investors, accounting, industrial, management, market, innovative, communicating, production, contextualization, shares