Ariz Siddiqui - Academia.edu (original) (raw)

Papers by Ariz Siddiqui

Capital, in the business context, refers to any asset that will produce future cash flows. The mo... more Capital, in the business context, refers to any asset that will produce future cash flows. The most well known asset types are tangible in nature. Tangible capital therefore refers to the physical and financial assets of the organization. The value of such assets is disclosed periodically (by publicly listed companies) and can be found easily on the balance sheet of the Company's financial records. Physical assets can mean land, machinery, inventory, plants, trucks, etc. whereas financial assets refer to the shareowners equity, retained earnings, working capital, prepaid expenses, accounts receivables, etc. Intangible assets on the other hand, such as the skills of the workforce and its organization, are increasingly becoming important towards determining future profits. However, they are much harder to determine, harder still to quantify into a value and therefore are never reported. Hence these types of assets remain largely invisible to the external world-and more often than not to insiders as well. Thomas Stewart, a pioneer in the study of such intangible assets, is credited with having coined the term 'Intellectual Capital' to refer to these assets. After more than a decade of studies by various other scholars in this area, there is general agreement that Intellectual Capital itself is composed of three distinct types of capital-Human Capital, Structural Capital and Relational Capital. • Human Capital is the availability of skills, talent and know-how of employees that is required to perform the everyday tasks that are required by the firm's strategy. • Structural Capital is the availability of information systems, knowledge applications, databases, processes and other infrastructure required to support the firm in executing its strategy. • Relational Capital is the external linkage of the Company with Suppliers and Customers that enables it to procure and sell goods and services in an effortless manner. In the modern world of cut throat competition firms are paying a lot of attention on Intellectual Capital because it is a very important aspect that contributes a lot in development of the core competencies of the firm and a very important source of generating future cash flows.. This article therefore tries to give the importance of Intellectual Capital for the organizations in the modern era, emphasizes on the measurement and recording of it in the balance sheet of the organization in order to make the stakeholders aware about the contributions of the Intellectual Capital in the organizational growth and development, use of technology for the purpose of valuation and recording of Intellectual Capital and also tries to evaluate the attitude of Indian enterprises towards Intellectual Capital.

Capital, in the business context, refers to any asset that will produce future cash flows. The mo... more Capital, in the business context, refers to any asset that will produce future cash flows. The most well known asset types are tangible in nature. Tangible capital therefore refers to the physical and financial assets of the organization. The value of such assets is disclosed periodically (by publicly listed companies) and can be found easily on the balance sheet of the Company's financial records. Physical assets can mean land, machinery, inventory, plants, trucks, etc. whereas financial assets refer to the shareowners equity, retained earnings, working capital, prepaid expenses, accounts receivables, etc. Intangible assets on the other hand, such as the skills of the workforce and its organization, are increasingly becoming important towards determining future profits. However, they are much harder to determine, harder still to quantify into a value and therefore are never reported. Hence these types of assets remain largely invisible to the external world-and more often than not to insiders as well. Thomas Stewart, a pioneer in the study of such intangible assets, is credited with having coined the term 'Intellectual Capital' to refer to these assets. After more than a decade of studies by various other scholars in this area, there is general agreement that Intellectual Capital itself is composed of three distinct types of capital-Human Capital, Structural Capital and Relational Capital. • Human Capital is the availability of skills, talent and know-how of employees that is required to perform the everyday tasks that are required by the firm's strategy. • Structural Capital is the availability of information systems, knowledge applications, databases, processes and other infrastructure required to support the firm in executing its strategy. • Relational Capital is the external linkage of the Company with Suppliers and Customers that enables it to procure and sell goods and services in an effortless manner. In the modern world of cut throat competition firms are paying a lot of attention on Intellectual Capital because it is a very important aspect that contributes a lot in development of the core competencies of the firm and a very important source of generating future cash flows.. This article therefore tries to give the importance of Intellectual Capital for the organizations in the modern era, emphasizes on the measurement and recording of it in the balance sheet of the organization in order to make the stakeholders aware about the contributions of the Intellectual Capital in the organizational growth and development, use of technology for the purpose of valuation and recording of Intellectual Capital and also tries to evaluate the attitude of Indian enterprises towards Intellectual Capital.