INTELLECTUAL CAPITAL IN ACCOUNTING: DEFINITION AND ASSESSMENT METHODOLOGY

The article sheds a light on the concept, structure and role of intellectual capital in ensuring the competitiveness of business entities and targeting their financial results. The article discloses different approaches to describing the essence of intellectual capital. The author defines intellectual capital as the gained in intellectual activity set of knowledge, expertise, skills, creativity and relationships, having economic value and used in production and exchange for profit-making purposes. Intellectual capital, viewed as an intangible asset, is not always fully protected by business entities' ownership rights. The author argues that micro-level intellectual potential assessment is the prerequisite for development of intellectual capital management policy. The article discusses intellectual capital assessment comparing different methodologies of intellectual capital measurement and substantiating its components. The author puts a lot of emphasis on reliable fair value for a company obtained by micro-level intellectual potential assessment providing information for external stakeholders and rational managerial decisions aimed at enhancing business models. The author shows that intellectual capital assessment comprises different tools including market capitalization, financial and non-financial methods. The article demonstrates that direct measurement methods involve allocation and evaluation of intellectual capital components applying specific formulas or algorithms with no guarantee of value measurement accuracy. Therefore, the best possible methodology for assessing intellectual capital remains the balanced scorecard.