Knowledge balance sheet

A knowledge balance sheet is an instrument for structured identification, representation and development of intellectual capital. It shows the connections between organizational goals, business processes, intellectual capital and business success. It is able to reveal the mutual influence between the factors of success and the most efficient investment levers, specifies the strategic direction for knowledge management processes and checks the degree to which they have been implemented.^[1]^[2]

Two views

View from the

outside as a reporting instrument: stakeholders obtain reliable data on the intangible assets and on the future-fitness of the enterprise.
inside as a management instrument: the measurement and assessment of the intellectual capital can be systematically controlled, developed and reflected upon.

Benefits

uncovering weak spots and potentials for maximizing business success
transparency
cost/benefit ratio of knowledge development
communication with shareholders
organizational development
capital acquisition
cooperation
customer orientation
understanding of interrelationships
synergies with existing mgmt. systems (QM, risk mgmt.)

Indirect benefits

gathering and definition of intellectual capital allows clearer communication
employees understand their company better
process optimization and innovation
increased attractiveness for employees and cooperation partners

Prerequisites

Management systems should already be utilized
Management (openness, willingness to talk/engage dialog, recognition)
openness for employees
anxiety-free corporate culture
documented and communicated business strategy

Criticism

Lack of generally recognized system
generally not verified by auditors
connection between knowledge balance sheet and future revenue opportunities difficult to verify
may exacerbate the asymmetry of knowledge between management and outside stakeholders
possible misuse as a marketing instrument

References

^ Wang, Kesheng; Kovacs, George; Wozny, Michael (2006), Knowledge enterprise: intelligent strategies in product design, manufacturing, and management : proceedings of PROLAMAT 2006, IFIP TC5 international conference, June 15–17, 2006, Shanghai, China, Springer, p. 91, ISBN 978-0-387-34402-7
^ IAS 39 International Accounting Standard 39: Financial Instruments: Recognition and Measurement

Ju-Chuan Wu, Chinho Lin (2013). "A BALANCE SHEET FOR KNOWLEDGE EVALUATION AND REPORTING" (PDF). {{cite journal}}: Cite journal requires |journal= (help)

[Wang2006-1] Wang, Kesheng; Kovacs, George; Wozny, Michael (2006), Knowledge enterprise: intelligent strategies in product design, manufacturing, and management : proceedings of PROLAMAT 2006, IFIP TC5 international conference, June 15–17, 2006, Shanghai, China, Springer, p. 91, ISBN 978-0-387-34402-7

[2] IAS 39 International Accounting Standard 39: Financial Instruments: Recognition and Measurement

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