Research by Arthur Andersen of 3500 companies revealed that on the balance sheet the following percentages reflected market value for the representative years: 95% in 1978, 28% in 1998, and 15% in 2002. The International Intangible Management Standards Institute predicts it will be 5% in 2005 based on these trends. This means that conventional accounting reports will fail to capture 95% of the value of business and its operations by 2005, unless there is a change. From an investor perspective, things are not much better. According to the (USA) National Academy of Sciences Task Force on Intellectual Property Management (Sept. 1999), more than 75% of the capitalization of the S&P 500 reflects the value placed on knowledge and other intangible assets.
In the book Intangible Management: Tools for Solving the Accounting and Management Crisis, Ken Stanfield explains the value of intangibles (intangible assets, intangible liabilities, intangible revenues, and intangible expenses) and most importantly how to measure, track and record them on the new financial reports - referred to Intangible Corporate Reports. As our greatest assets today are Knowledge, Relationships, Emotional Intelligence and Time - these value drivers must be measured and managed.
This book needs to be the new standard (Bible) for Business Management and Accounting. This book should be essential reading in every School and University as learning is the only true sustainable competitive advantage we have, and this knowledge needs to be known.
Instead of focussing on the traditional short-term "profit at any cost" mentality, Intangible Management take a sustainable viewpoint and explores how managers can manage a completely new set of value drivers in order to create a workplace where people want to work, and customers want to buy.
Sustainability, social responsibility and ethical behavior are have long been missing from traditional management theory. With Intangible Management, these issues are now back on center stage - where they belong.
This book is an excellent read and a must buy if you are interested in keeping up to date with the latest thinking in management science.