A Report on a Case Study on Measuring Intangible Assets an Indian Experience
A REPORT ON
Case Study on Measuring Intangible Assets – Indian Experience
- 1 -
BEYOND BALANCE SHEETS…
Measuring Intangible assets- an Indian case study
“Just as you can 't measure what you can 't describe, you can 't manage what you can 't measure...”
While many companies have strived to differentiate their annual reports and make them informative, attractive and easy to read, most still take a rear-view-mirror approach, focusing almost exclusively on history and analyses of past performance. But in today’s world, as we have advanced into the Information Age, more companies will find that those assets most easily measured are not necessarily most valuable; increasingly they will be forced to measure intangible assets in a predictive way that is more reflective of how the company is actually run.
Today, even traditional manufacturing companies are finding themselves not simply selling a product, such as a car, but selling customer service, a lifestyle, convenience, and so much more. If we take the example of airline industry, it also provides another clear example of this phenomenon. Where airlines once had large tangible inventories of aircraft on their books, they now lease the equipment, changing the nature of the business to one built on intangible assets - landing rights, booking systems, customer service, and brand.
Unfortunately, knowledge itself cannot be "managed." But knowledge that is captured and converted into an asset (tangible or intangible) is indeed a commodity one can count on, literally, to improve the performance of the company and help generate profits.
No company can own either of the critical assets, neither the employees nor the customers. The value they provide to the company is only temporary and cannot be considered a measurable asset unless it is captured and converted into something the company can own - any new knowledge or skill that can be reused or applied in other areas, be it a new learning process or a new
Case Study on Measuring Intangible Assets – Indian Experience
- 1 -
BEYOND BALANCE SHEETS…
Measuring Intangible assets- an Indian case study
“Just as you can 't measure what you can 't describe, you can 't manage what you can 't measure...”
While many companies have strived to differentiate their annual reports and make them informative, attractive and easy to read, most still take a rear-view-mirror approach, focusing almost exclusively on history and analyses of past performance. But in today’s world, as we have advanced into the Information Age, more companies will find that those assets most easily measured are not necessarily most valuable; increasingly they will be forced to measure intangible assets in a predictive way that is more reflective of how the company is actually run.
Today, even traditional manufacturing companies are finding themselves not simply selling a product, such as a car, but selling customer service, a lifestyle, convenience, and so much more. If we take the example of airline industry, it also provides another clear example of this phenomenon. Where airlines once had large tangible inventories of aircraft on their books, they now lease the equipment, changing the nature of the business to one built on intangible assets - landing rights, booking systems, customer service, and brand.
Unfortunately, knowledge itself cannot be "managed." But knowledge that is captured and converted into an asset (tangible or intangible) is indeed a commodity one can count on, literally, to improve the performance of the company and help generate profits.
No company can own either of the critical assets, neither the employees nor the customers. The value they provide to the company is only temporary and cannot be considered a measurable asset unless it is captured and converted into something the company can own - any new knowledge or skill that can be reused or applied in other areas, be it a new learning process or a new