Proceedings of the 3rd European Conference on Intellectual Capital

Table 1: (Morariu, 2010)
No Author
Maria Cristina Morariu
Year <strong>of</strong>
publication
IC classification:
Internal,
External, Human
Number <strong>of</strong>
sample
companies
Country
1 Guthrie, J. and Petty, R. 2000 1 19 Australia
2 Brennan, N. 2001 1 11 Ireland
3 Bontis, N. 2003 1 10,000 Canada
4 Goh, P.C. and Lim, K.P. 2004 1 20 Malaysia
5 Wong, M., Gardner, C. 2005 1 60 New Zealand
6 Abdolmohammadi, M.J. 2005 1 58
USA
7 Bukh, P.N. et al 2005 68 Denmark
8 Bozzolan, S., O'Regan, P. and Ricceri, F. 2006 1 30x2 Italy, UK
9 Boesso, G. and Kumar, K. 2007 72 Italy & USA
10 White, G., Lee, A. and Tower G. 2007 102 Australia
11 Vergauwen, Bollen and Oirbans 2007 2007 1 60 Sweden, Denmark, UK
12 Striukova, L., Unerman, J. and Guthrie, J. 2008 1 15
UK
13 Ax, C. and Marton, J. 2008 27 Sweden
14 Bruggen, A., Vergauwen, P. and Dao, M 2009 125 Australia
15 Sharabati, A. A., Jawad, S. N. and Bontis, N. 2010 1 15 Jordan
The studies above prove that companies in <strong>the</strong> past tried to report IC and thus <strong>the</strong>y may be used
toge<strong>the</strong>r with <strong>the</strong> existing guidelines issued in this respect (MERITUM 2002, DMTI 2003) as a
benchmark and a framework for nowadays entities. Additional arguments encouraging entities to
report IC are represented by <strong>the</strong> benefits companies have if reporting IC. Some <strong>of</strong> <strong>the</strong>m are
summarized below against <strong>the</strong> downside aspect <strong>of</strong> reporting IC.
According to Bukh (2003) IC reports by reducing <strong>the</strong> uncertainty shall reflect in lower risk premium
and <strong>the</strong>reby a more accurate valuation <strong>of</strong> <strong>the</strong> companies. Botosan (Mouritsen, Nikolaj and Marr 2004)
argues that disclosing information on factors such as relationships, internally generated assets and
knowledge is likely to lower <strong>the</strong> cost <strong>of</strong> equity by decreasing uncertainty about future prospects <strong>of</strong> a
company and facilitates a more precise valuation <strong>of</strong> <strong>the</strong> company. Fur<strong>the</strong>rmore, some may say that
voluntary intellectual capital disclosure (ICD) is an appropriate approach for companies to meet
stakeholders’ IC information needs and to reduce <strong>the</strong> information asymmetry (Vergauwen, Bollen and
Oirbans 2007, Bozzolan, O'Regan and Ricceri 2006). Surprisingly, <strong>the</strong> results obtained by Bruggen,
Vergauwen and Dao (2009) contradict this affirmation. The <strong>European</strong> Union’s Green Book (2001)
considers a wider set <strong>of</strong> benefits such as improved company image, employees’ commitment and
productivity and use <strong>of</strong> natural resources.
Never<strong>the</strong>less, <strong>the</strong>se benefits must be compared with <strong>the</strong> cost <strong>of</strong> providing ICDs because if <strong>the</strong>y are
not <strong>of</strong>fset by benefits, companies would not be stimulated to undertake <strong>the</strong> process (Polo and
Vazquez 2008). Meer-Kooistra & Zijlstra (2001) findings show that in practice for <strong>the</strong> time being
nei<strong>the</strong>r providers nor users <strong>of</strong> IC information are keen to report it externally. Moreover, some authors
found that practitioners are reluctant to publish such information because in <strong>the</strong>ir view it will mean
giving insight into <strong>the</strong>ir competitive advantage, and that financial analysts and <strong>the</strong> capital market do
not pay so much attention to IC disclosures, as <strong>the</strong>y are sceptical, <strong>the</strong>y don’t understand it, <strong>the</strong>y find
difficult to compare as <strong>the</strong>y are unique, <strong>the</strong>y consider it irrelevant as <strong>the</strong> information provided show
indicators <strong>of</strong> general interest without specifying <strong>the</strong> management’ value creation model (Meer-
Kooistra & Zijlstra, 2001; Bukh, 2003; Mouritsen, 2003).
5. Conclusions
Review <strong>of</strong> <strong>the</strong> literature proves that IC is a controversial concept due to some authors considering it
as a capital component, or as an intangible asset, and last but not list as a liability. This never ending
debate was <strong>the</strong> intrigue <strong>of</strong> our paper that in addition contains our opinions too. According to our
purposes, we have managed to (1) define and explain ourselves IC; (2) prove that IC meets asset
definition; (3) provide a new tool for measuring IC; (4) bring convincing arguments that IC reporting is
possible and desirable. As any study, our paper has limitations as follows: When defining IC we
disregarded <strong>the</strong> o<strong>the</strong>r components <strong>of</strong> IC as defined by o<strong>the</strong>r researchers. When exposing our way to
determine control we took into account that achieving an objective depends significantly on one
department. In reality one department may influence <strong>the</strong> achievement <strong>of</strong> several goals, and one goal
may be achieved by <strong>the</strong> cumulative efforts <strong>of</strong> more than one department. The tool we have proposed
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