Voluntary disclosures of intellectual capital

Abstract

Purpose -This paper aims to investigate inter firm intellectual capital (IC) disclosures and its variations in top 20 listed pharmaceutical companies in India, study the category wise and element wise IC disclosures (ICD), find out the impact of ICD on the creation of IC in monetary terms, find out correlation between IC valuation and its disclosure, and test significance of correlation. Design/methodology/approach -This is an exploratory and empirical study of ICD by sample companies in 2009 using content analysis. IC is valued as market value minus book value. Five-point scale (0-4), mean disclosure score, range, Chi-squares, Karl Pearson's correlation and Student's t-test are used for analysis and interpretation. Findings -Although top 20 companies of knowledge-led industry, ICD are low, narrative and varying significantly among companies. ICD score varies in range of 4 to 36 against expected score of 96. External capital with mean score of 18.78 is the most disclosed category. Brands and business collaborations is most disclosed element of IC, followed by employee competence and internal organizational capital respectively. ICD leads to creation of IC in some companies. Markets reflected true valuations of ICD in seven companies, and high degree of inconsistency in 13 companies. Overall correlation between IC valuation and disclosure is negative, weak and insignificant. Practical implications -Sector-specific intangible asset monitors should be formulated to capture ICD. Originality/value -The paper measures ICD using five-point scaling technique, it uses Chi-square test (non-parametric test) to calculate inter-firm variations. The paper also correlates ICD and valuation of respective companies with Spearman's correlation for the first time in pharmaceutical companies in India. It proposes inclusion of fourth category i.e. sector-specific items in existing models of ICD.

Intellectual capital disclosure in private sector listed companies in India

“…They confirmed the findings in Kamath (). Applying Guthrie and Petty's () approach, Singh and Kansal () conducted research on the top 20 pharmaceutical companies in India. They focused on market‐to‐book value and found that RC was the most disclosed capital.…”

Intellectual capital: Concepts, components and indicators: A literature review

“…Table 5 represents relational capital indicators for each category. Tai & Chen, 2009;Beattie & Thomson, 2007;Martin, 2000;Guthrie & Petty, 2000;Singh & Kansal, 2011;Cabrilo et al, 2009;Ortiz, 2009;Kim et al, 2010customer relationship Ramezan, 2011Bontis, 1998;Asonitis & Kostagiolas, 2010;Ortiz, 2009Customer complaint Ramezan, 2011Cabrilo et al, 2009;Wall, 2005Customer database Ramezan, 2011Ortiz, 2009;Beattie & Thomson, 2007 Customer retention rate Han & Han, 2004;Kim et al, 2010 Customer satisfaction Tai & Chen, 2009;Han & Han, 2004;Beattie & Thomson, 2007;Cabrilo et al, 2009;Kim et al, 2010;Wall, 2005 Customer service capability Ramezan, 2011 customer's needs Identifying Beattie & Thomson, 2007;Customers ,Tai & Chen, 2009Han & Han, 2004;Beattie & Thomson, 2007;Guthrie & Petty, 2000;Singh & Kansal, 2011;Wall, 2005 New strategic customers Beattie & Thomson, 2007 Unit sales to customer Average revenue per unit Cabrilo et al, 2009;Han & Han, 2004Patients Peng et al, 2007 Stakeholders Knowledge/acquaintance with community …”

“…It includes assessment of the stored knowledge value , the cycle of liquid capital , as well as accounting of administration expenses". IT Beattie & Thomson, 2007;Rudez & Mihalic, 2007;Cabrito et al, 2009 Systems information/network Beattie & Thomson, 2007;Tai & Chen, 2009;Singh & Kansal, 2011;Guthric & Petty, 2000;Peng et al, 2007;Kim & Kunter , 2009;Wall, 2005Organizational learning Beattie & Thomson, 2007Peng et al, 2007;Kim & Kunter, 2009 Intellectual Property Kim & Kunter, 2009;Peng et al, 2007;Bozbura & Beskes, 2007 4. Conclusions mentioned, the components of intellectual capital indicate firm future value and the ability to generate financial results.…”

The drivers of intellectual sustainability in a regional agriculture, cattle, and forest farmstead

“…The company has focused primarily on the disclosure (Sonnier et al, 2008;Singh and Kansal, 2011;Branswijck and Everaert, 2012) of their brands (ISD 3 to ISD 7 ) and strategic alliances (ISD 12 to ISD 14 ), although none procedure has been implemented to measure, recognize those intangibles in the financial reports (Koza and Lewin, 2000;Seethamraju, 2003;Chang et al, 2005). It has followed a strategy based on the voluntary disclosure of information.…”

“…Relating its dissemination, those resources have been capitalized and included in the organizations' balance sheets (in the cases supported by international accounting standard 38) or reported through complementary statements (intellectual capital reports, programs, scoreboards, ratios, qualitative approaches). Those measurement and disclosure approaches (Sonnier et al, 2008;Singh and Kansal, 2011;Branswijck and Everaert, 2012) tend to complement the traditional financial statements (balance sheet, profit and loss account, cash flows statements), providing a more comprehensive and integrated view of the factors that potentially create economic returns.…”