Intellectual capital: Australian annual reporting practices

Abstract

This study reports the results of an empirical examination of Australian annual reporting of intellectual capital. The findings suggest that the development of a model for reporting intangibles is piecemeal and not widely spread. The outcomes of our exploratory investigation are threefold. First, the key components of intellectual capital are poorly understood, inadequately identified, inefficiently managed, and not reported within a consistent framework when reported at all. Second, the main areas of intellectual capital reporting focus on human resources; technology and intellectual property rights; and organisational and workplace structure. Third, even in an Australian enterprise thought of as``best practice'' in this regard, a comprehensive management framework for intellectual capital is yet to be developed, especially for collecting and reporting intellectual capital formation. In conclusion, Australian companies do not compare favourably with several European firms in their ability to measure and report their intellectual capital in the annual report.

Relationship between Unionized Companies, Government Ownership and Reporting Human Capital Information in Corporate Annual Reports

“…Previous ICD studies consistently showed that HCD in annual reports was predominantly disclosed after relational capital disclosure (RCD) (e.g., Guthrie & Petty 2000;Brennan 2001;Bozzolan, O' Regan & Ricceri 2006;Campbell & Rahman 2010;Abhayawansa & Azim 2014). However, several other recent studies (e.g., Wagiciengo & Belal 2012;Bellora & Guenther 2013;De Silva, Stratford & Clark 2014).…”

“…Previous studies have demonstrated the practice of HCD encapsulated within ICD (Guthrie & Petty 2000;Yi & Davey 2010;Campbell & Rahman 2010). The first study in this stream was conducted by Guthrie and Petty (2000) in Australia.…”

“…The findings suggested that human capital was the second most popular information disclosed (after relational capital) and accounted for 30% of the total ICD. Many subsequent studies followed the similar genre of Guthrie and Petty (2000) Silva et al 2014 in New Zealand) used corporate annual reports as the study subject. In the Malaysian context, similar studies were conducted by Haji and Ghazali (2012) and Amin, Saringat, Hassan and Ismail (2013).…”

“…The first study in this stream was conducted by Guthrie and Petty (2000) in Australia. This study has been extensively cited and has paved the way for other studies worldwide.…”

“…Instead, HCD is only made voluntarily and can be found interspersed throughout annual reports. As long as the information disclosed in annual reports pertains to human capital, such information can be classified as HCD. In general terms, the intent of such disclosure is to provide relevant information for related users to satisfy the need that enhances decision-making and accountability (Guthrie & Petty 2000;Verrecchia 2001). In particular, HCD is the information on the knowledge, capabilities, and motivation of the workforce that a company discloses.…”