In the knowledge economy, more than 80 percent of all assets of companies are intangibles i.e. Intellectual Capital. Determining the real value of these assets is crucial to any investment decision. Thus it is critical for a company to obtain a fair valuation of these assets, be it either a corporation or venture. Removing the information gap between investors and the investment reduces the risks and uncertainties for the benefit of both.
A company’s Intellectual Capital (IC) is usually determined as the sum of its human capital, structural capital and customer capital. Areopa, a European company working in this field has utilized a structured and standardized asset valuation methodology underpinned by accurate econometric appraisals. The methodology also benchmarks the wider environment and industry trends for improved accuracy. The methodology which is compliant with international Accounting Standards provides a framework for managing IC (i.e., for identifying, securing and adding controls and eventually transforming IC into tangible assets). As intangible assets are converted into tangible assets corporate value stated on the company or venture’s books increases. The “Current and Future Assessment” figure shows at a high level what is involved.