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INTELLECTUAL CAPITAL REPORTING STUDY OF IT-SECTOR CORPORATIONS IN INDIA

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Author(s): Madan Lal Bhasin

Journal: Australian Journal of Business and Management Research
ISSN 1839-0846

Volume: 1;
Issue: 1;
Start page: 16;
Date: 2011;
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Keywords: Intellectual capital | reporting | Information Technology corporations | India | IC reports

ABSTRACT
Intellectual capital (IC) can prove to be a source of competitive advantage for businesses ultimately leading to wealth generation in the long-term. At present, reporting of IC information is done by very few leading corporations purely on a “voluntary” basis. Unfortunately, the omission of IC information may adversely influence the quality of decisions made by shareholders, or lead to material misstatements. India presents an ideal case for the analysis of IC reporting by the IT corporations because the economy has been undergoing rapid transformation.This study attempts to provide an insight into the style of IC reporting done by the top ITsector corporations in India. In order to survey the recent IC reporting practices, we conducted a study of 16 IT corporations in which “content analysis” was performed on their 2007 to 2009 annual reports. The results of this study confirmed that IC reporting in these corporations is almost negligible, and IC reporting had not received any preference from the mentors of these corporations. A major recommendation for corporations is to develop strategic and tactical initiatives that provide for „voluntary‟ reporting of IC. These initiatives may initially be used for internal management purposes, but an external stakeholder-focus IC report should be the ultimate long-run goal.
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