ABSTRACT
This chapter elaborates on the ways in which intellectual capital (IC) indicators can work. It emphasizes the idea of relevance of numerical representation of an organization's IC. The chapter considers Power's proposition about the limits of indicators by discussing the production, transmission, and consumption of IC indicators. The 'accountingization' of IC is an example of how members of organizations demand numbers to make sense of their activities. The objective of measurements in financial reports is, according to the International Accounting Standards Board (IASB), for the measurement to be decision useful. The main argument for this is that the IASB develops standards to support investors and other suppliers of financial resources. An alternative approach to IC indicators is to define relevance from a managerial or even strategic perspective. The managerial approach dominates control literature in general, and the balanced scorecard in particular, and the literature emphasizes that measurements should be connected to what is important in the organization.
