Themes of human capital disclosure

Abstract

In the knowledge-based economy, value creation is mostly determined by the effective utilization of intangible assets, and these intangible is often referred to as intellectual capital. According to Stuart (1996) intellectual capital is recognized as the world’s most important wealth creator. The set of physical and intangible assets is at the core of the firm's competitive advantage. Disclosure is the process through which an entity communicates with the outside world. Intellectual capital disclosure can be defined as information delivery in the financial reports which is related to knowledge resources of the company (human capital, structural capital, and relational capital) that aim to provide an overview of company’s qualities and competitive advantage. This paper is an attempt to understand the different themes of human capital disclosure.