During the holiday break, many professionals look forward to enjoying time to read books and articles that they have collected throughout the year. An interesting read for those involved in the business of intangible assets is Intangible Capital: Putting Knowledge to Work in the 21st Century Organization by Mary Adams and Michael Oleksak.
As the book notes, cash, brick-and-mortar assets and inventories no longer represent the majority of corporate value. It has been estimated that 70 percent of the value of today’s companies lies in intangible assets — human capital, reputation, relationships, intellectual property, and organizational knowledge. Of these, the authors propose that knowledge is the critical resource that fuels today’s economy.
Because of the new drivers in corporate value, the authors propose new ways that companies can account for corporate value. Traditional balance sheets don’t provide investors, managers, and other stakeholders with a good financial understanding of the cost of intangibles, nor do they clearly show all of the income that is derived from intangibles. The book provides tips that will help managers adapt to the knowledge-based economy and measure the true effect of intangibles on the bottom line.
I look forward to connecting with you on IP Spotlight in 2011. Happy Holidays!