guidelines for managing and reporting on intangibles (intellectual
guidelines for managing and reporting on intangibles (intellectual
guidelines for managing and reporting on intangibles (intellectual
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
how knowledge is produced, accumulated <str<strong>on</strong>g>and</str<strong>on</strong>g> destroyed, <str<strong>on</strong>g>and</str<strong>on</strong>g> of the ways in which<br />
knowledge can be used to generate wealth. To this extent, the identificati<strong>on</strong>,<br />
systematizati<strong>on</strong> <str<strong>on</strong>g>and</str<strong>on</strong>g> generalizati<strong>on</strong> of good practices in the management of <strong>intangibles</strong><br />
need to be encouraged. Additi<strong>on</strong>ally, in order to improve the ability of financial<br />
statements to offer an adequate picture of the firm’s financial positi<strong>on</strong>, it will be<br />
necessary to develop new <str<strong>on</strong>g>reporting</str<strong>on</strong>g> practices that reveal the intangible determinants of<br />
the firm’s financial positi<strong>on</strong>.<br />
The purpose of the Guidelines <str<strong>on</strong>g>for</str<strong>on</strong>g> Managing <str<strong>on</strong>g>and</str<strong>on</strong>g> Reporting <strong>on</strong> Intangibles (hereafter,<br />
Guidelines) is, <strong>on</strong> <strong>on</strong>e h<str<strong>on</strong>g>and</str<strong>on</strong>g>, to assist companies in the development of their ability to<br />
identify, measure <str<strong>on</strong>g>and</str<strong>on</strong>g> c<strong>on</strong>trol its <strong>intangibles</strong> in order to increase the efficiency of their<br />
management <str<strong>on</strong>g>and</str<strong>on</strong>g> to improve their financial per<str<strong>on</strong>g>for</str<strong>on</strong>g>mance. On the other h<str<strong>on</strong>g>and</str<strong>on</strong>g>, the<br />
Guidelines attempt to provide a useful guide <str<strong>on</strong>g>for</str<strong>on</strong>g> firms willing to disclose in<str<strong>on</strong>g>for</str<strong>on</strong>g>mati<strong>on</strong> <strong>on</strong><br />
the intangible determinants of their value creati<strong>on</strong> capability in order to help the<br />
providers of capital to efficiently estimate the future payoffs <str<strong>on</strong>g>and</str<strong>on</strong>g> the risks associated<br />
with their investment opportunities.<br />
It is important to stress that since these Guidelines aim at providing a broad framework<br />
<str<strong>on</strong>g>for</str<strong>on</strong>g> the management <str<strong>on</strong>g>and</str<strong>on</strong>g> disclosure of in<str<strong>on</strong>g>for</str<strong>on</strong>g>mati<strong>on</strong> <strong>on</strong> <strong>intangibles</strong> <str<strong>on</strong>g>for</str<strong>on</strong>g> organizati<strong>on</strong>s of<br />
any kind. There<str<strong>on</strong>g>for</str<strong>on</strong>g>e, they must be c<strong>on</strong>sidered just as a starting point. Further work will<br />
be required in order to develop a more detailed <str<strong>on</strong>g>and</str<strong>on</strong>g> specific guide, which could include<br />
additi<strong>on</strong>al elements, such as working documents <str<strong>on</strong>g>for</str<strong>on</strong>g> the measurement process or<br />
business cases of firms that have underg<strong>on</strong>e the entire process, from identificati<strong>on</strong> to<br />
m<strong>on</strong>itoring. 5<br />
The rest of the document is structured as follows. The next secti<strong>on</strong> justifies the need <str<strong>on</strong>g>for</str<strong>on</strong>g><br />
the Guidelines <str<strong>on</strong>g>for</str<strong>on</strong>g> Managing <str<strong>on</strong>g>and</str<strong>on</strong>g> Reporting <strong>on</strong> Intangibles. Secti<strong>on</strong> three presents a<br />
c<strong>on</strong>ceptual framework which covers the theoretical premises <strong>on</strong> which this proposal is<br />
based <str<strong>on</strong>g>and</str<strong>on</strong>g> introduces the definiti<strong>on</strong>s <str<strong>on</strong>g>and</str<strong>on</strong>g> the main c<strong>on</strong>cepts that must be understood <str<strong>on</strong>g>for</str<strong>on</strong>g><br />
the development of management <str<strong>on</strong>g>and</str<strong>on</strong>g> <str<strong>on</strong>g>reporting</str<strong>on</strong>g> systems that take <strong>intangibles</strong> into<br />
c<strong>on</strong>siderati<strong>on</strong>. Secti<strong>on</strong> four describes the process that should be followed within the firm<br />
<str<strong>on</strong>g>for</str<strong>on</strong>g> the design <str<strong>on</strong>g>and</str<strong>on</strong>g> implementati<strong>on</strong> of an in<str<strong>on</strong>g>for</str<strong>on</strong>g>mati<strong>on</strong> system <str<strong>on</strong>g>for</str<strong>on</strong>g> the management of<br />
<strong>intangibles</strong> <str<strong>on</strong>g>and</str<strong>on</strong>g> their subsequent m<strong>on</strong>itoring. Secti<strong>on</strong> five c<strong>on</strong>tains a guide <str<strong>on</strong>g>for</str<strong>on</strong>g> the<br />
preparati<strong>on</strong> of a report <strong>on</strong> the intangible determinants of the firm’s value <str<strong>on</strong>g>and</str<strong>on</strong>g>, lastly,<br />
secti<strong>on</strong> six presents some remarks that we hope will be useful <str<strong>on</strong>g>for</str<strong>on</strong>g> companies in the<br />
process of producing a report of this nature.<br />
5 This is the starting point of E*KNOW-NET, a thematic network <strong>on</strong> <strong>intangibles</strong> financed by the<br />
European Commissi<strong>on</strong> under the STRATA program, that started up in September 2001<br />
6