APPLICATION OF INTELLECTUAL CAPITAL FINANCIAL VALUATION METHODS UNDER CONDITIONS OF ECONOMIC RECESSION

Abstract

Intellectual capital measurement, as a problem of management research, is investigated for third decade already. Intellectual capital measurement methodology is still not well-established neither in management literature nor in business practice. Intellectual capital financial valuation methods are generally based on the data of financial accounting, stock market information and various economic indicators. These methods are often positively assessed for the ease of their application, for the reference to objective and easy obtainable information, as well as universally perceived resulting information. However, they are more applicable under the stable economic circumstances. Lots of barriers arise, complicating applicability of these methods in practice and distorting interpretation of valuation results under the extreme economic fluctuation and especially during the deep recession.
The main objective of this research is to reveal problems and difficulties, complicating application of the intellectual capital financial valuation methods under conditions of economic recession.
The nature and methodological features of intellectual capital financial valuation methods are analyzed, and their merits and demerits are highlighted in this paper first of all. The prevailing tendencies of micro- and macro-economic changes and their influence on the applicability of intellectual capital financial valuation methods are explored afterwards. The main findings and conclusions of this paper are based on the positivistic methodological approach.

DOI: http://dx.doi.org/10.5755/j01.em.17.3.2092