Intangible investments (consisting of research and development, training, software and commercial) accounted for 21 % of gross capital in 1974, 41% in 1987. Since the early 2000, hundreds of millions are spent each year as companies in research and development , which engages the intellectual capital of companies and their partners.
To protect their research and development (R & D) companies are generally apply intellectual property rights and laws against unfair competition. The service sector of the economy, exacerbated by the boom in services linked to the arrival of the Internet, has highlighted a structural defect of accounting standards to capture the full value of synergies as shown in Industry Europe Magazine.
According to several studies, 75-90 % of the market capitalization of listed companies is composed of intangible assets. There is more correlation between market value and book value, and this gap has widened irreparably. Intangible capital not explain a single variable adjustment, it has become the economic concept associated with the bulk of the value of the company: its intangible value.
Intellectual capital can remain a concept of general use, particularly in the context of knowledge management, but it also tends to formalize indicators of non-financial management. Investors are in effect exposed to this data that is lacking the austere financial statements.
The intellectual capital is, in practice, the possession by an organization expertise, experience, technology which are synergies and the competitive advantage of the company. These are found not only in research and development, but also, increasingly, in all other areas of the company (marketing, purchasing, production, logistics, IT).
Knowledge capital of the company may be manifested in the form of explicit knowledge and tacit knowledge. The information system is the explicit knowledge of the business, intellectual capital is rather tacit knowledge of employees.
The impact of IFRS on business varies depending on the particular industry. Credit institutions have been most affected by IAS 32 and IAS 39 as other businesses for example. It challenges the core accounting principles to the extent that it amends certain accounting concepts. The traditional accounting records the acquisition of property (say, a asset for a value of one thousand euros) and returns recorded in the income statement.
The principle of fair value requires, if we know that this income is only worth 500 euros, to recognize a loss potential and to show potential investors and shareholders the economic reality of the business assets.
The application of this method has led to criticism of accounting standards during the subprime crisis, a specialized Industry Europe Magazine wrote : The transition to IFRS now exposes companies to a very high volatility as well as their account balance in their income statement.