Corporate intellectual capital reporting

Few firms systematically take stock of their intellectual capital and of the added value of research. This under-recognition of intellectual capital can lead financial markets to favour traditional rather than research-intensive businesses. It also affects the allocation of resources within companies.

Although several methods of measuring and reporting intellectual capital have been developed, specially for internal management purposes, take-up in companies has been slow.

The use of intellectual capital should be further promoted, while improving the consistency of definitions and methods across Europe. It should take into account the views of stakeholders and the developments in accounting rules and corporate governance.

In this context, the Commission may provide guidance in identifying, measuring and reporting intellectual capital.

These issues are explored in the report "RICARDIS: Reporting Intellectual Capital to Augment Research, Development and Innovation in SMEs" published in June 2006 on the role of intellectual capital reporting in the research field. See the full report [ - 1,49 Mb]

The RICARDIS report is the outcome of the work of an expert group composed of specialists from all over Europe set up by the Commission. The relevant categories of intellectual capital are identified and the reasons for which they are important for research intensive SMEs to attract funds from the financial sector. Furthermore, it provides an overview of recent initiatives as well as comparative analyses based on a number of case studies. The findings of this report are in many cases not only applicable to SMEs, but also to other types of enterprise and to research organisations.

In addition to providing input to policy-making, the report is intended to raise awareness and engender debate among stakeholders and national administrations.