Reporting Intellectual Capital : Four studies on recognition

Abstract: This thesis contributes to the reporting of Intellectual Capital (IC) and includes four papers on the recognition and comparability of IC. IC, often called intangibles in the financial reporting discourse, reflects resources which create value in and for organizations. These resources originate out of human knowledge and capacities, which, through their uniqueness, can provide competitive advantages for an organization. As something intangible, IC is a challenge to report as it is not only a matter of reporting value that has been or can be realized but also a matter of reporting the creative processes focusing on present and future value. This challenge is a particular reflection of how and when to recognize IC as something reportable and is intensified if IC needs to be comparable.The thesis draws on the distinction that is made between mandatory and voluntary reporting when discussing recognition and comparability. Three of the studies relate to firms’ practices of reporting through annual reports. Since these reports contain both mandatory and voluntary sections, reflecting reporting both as a requirement as well as a possibility, different aspects of reported IC is emphasized. Using a wider range of documents, the fourth study relates to the enforcement of the mandatory reporting standards which the firms are required to apply in their reporting.As the overall finding in the thesis, three categories of recognition of IC are developed which reflect differences related to whether the reporting is mandatory, voluntary or, as this thesis argues, something in between. Reflected through the categories, comparability interrelates differently with recognition. The thesis contributes with the description of IC as a foundation for reporting which makes the matter of recognition of IC in reporting complex. It further highlights that through recognition of IC reporting is continuously expanding wherefore it is not possible to identify an end of an already expanded and demarcated reporting regime. In this expansion, by settling what is mandatory reporting through requested characteristics, voluntary reporting is defined.