engleski

VAIC-An Accounting Tool for IC Management

More and more companies are sensing a gap between the modern approach of value creation and the old way of monitoring operations. This discrepancy is typical of the situation companies face today: on the one hand there is modern business reality and on the other inappropriate traditional evaluating methods. What could be the cause for such situation? Many analysts consider that new business criteria require new indicators for accurate business decisions.(1) In my opinion, there are three essential elements, which form the difference in business activity: First, the principal characteristic of the alteration is the introduction of knowledge into products and services. After periods dominated by quantity, quality has become increasingly important. We can therefore define a new regularity in the activities of modern companies: In the same way the price fell with increased quantities of the product on the market in classical industrial conditions, now it falls with increased information content. Due to the first change labor has got an entirely different position. In contrast to the majority of labor before, which was simple and routine, now the majority of labor is tied to knowledge and the ability of the employees to transform it into profitable action. Depending on the capabilities of the employed, the same quantity of labor may now achieve completely different business results in contrast to prior times when a given amount of routine work produced more or less the same product quantity. Third, we have a totally altered structure of expenditures. In a traditional company the ratio between production and all other costs was 80:20 on the average. Today this ratio is almost vice versa. Production costs, which created the principal part of industrial economy, are almost insignificant for contemporary business, as is production itself in the total activity of a company. In conditions of scarcity, companies were primarily orientated towards the increase of quantity and according to this the entire system of measuring business performance was based on this. The best example is revenue, which is still considered to be an adequate criterion for company’s size. In the traditional company monitoring labor force and material costs was developed almost to perfection. Contrary to that, today’s significance of these costs is marginal. Considering these differences it is obvious that the accounting system analyzing the business activities in a company has to be changed and adapted. The once significant resources are becoming less important from the standpoint of modern business since knowledge has become the basic resource. However, there are still no appropriate information models providing necessary information on IC business activities, which is exactly the Achilles' heel of modern companies. Since the above mentioned course of information is hardly even monitored I would like to focus on that in my paper and share with you the efforts of my team to provide a theoretical and practical solution.

value added; intellectual potential; intellectual capital; measuring

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