Business research and intangible assets

The author further says that accountants fail to account for such intangible assets since they hold the opinion that they are not responsible for it. This view compares to the one by (Damodaran, 2009)where the author notes that accountants fail to properly categorize operating and capital expenses among firms that have extensive invaluable assets. Further, (Damodaran, 2009) notes that research & development expenses which should be capital expenses are treated as operating expenses hence resulting in skewed values for capital and profits. The intangible balance sheet is classified as comprising of three families with internal structure, external structure and individual competence (Sveiby, 2001). The internal structure for knowledge companies is held as the intangible value arising from patents, concepts and models that are acquired from outside sources or created by employees and owned by the respective entity.

Comparisons are also difficult to make (Sveiby, 2001). However, (Damodaran, 2009) fails to focus on people but rather advances that value can be measured through treatment of advertisement expenses as capital expenses by consumer product companies such as Coca-Cola or similar treatment of recruitment and training expenses by consulting firms such as KPMG. Such companies incur significant expenses in such areas for brand name awareness and gaining long-term customers. Further, (Sveiby, 2001) advances that people work outwards to build external structures or inwards to build internal structures. However, (Damodaran, 2009) holds that working of people in knowledge organizations is driven by alignment of corporate and stakeholder interests hence the basis for increase in usage of equity options for remuneration. This author indicates that professionals lack employment security hence having difficulties in managing well rounded personalities whereby job security addresses anxiety.