Measuring Intangible Assets

©Karl-Erik Sveiby 1 March 1997, Oct 2001. All rights reserved.

This section outlines a non-financial measurement system (Why non-financial?) for intangible assets based on the concept of the knowledge organization. The purpose of the measuring system is not to present a full and comprehensive picture of the intangible assets. It is not possible and this is why the all-comprehensive approaches have failed so far.

The purpose of the Monitor is practical and to "open a few windows" for managers to start testing the concepts. An interactive web-based tool for developing your own Intangible Assets Monitor is available at www.sveibytoolkit.com. An account of the approach can also be found in my book (Berrett-Koehler 1997) The New Organizational Wealth - Managing & Measuring Intangible Assets. 



To read more about how to calculate the indicators read the Intangible Assets Monitor.

This non-monetary approach to measuring has been used by companies in Sweden since the mid 80s and has created a "Swedish Community of practice", with a unique experience in this area. Managers in companies like WM-data, KREAB, Skandia AFS, Ericsson, Jacobsson & Widmark, Ångpanneföreningen, PLS Consult, Celemi, etc. are pioneering new methods for monitoring their strategies, based on the concepts. Most of them publish in Swedish language only, but some are available also in English.

Skandia's initiatives are well known. Updated versions of Skandia's Navigator can be found on Skandia's website.

Celemi has been publishing its Monitor since 1995. The Celemi Monitor for 1999 is available here.

PLS Consult is measuring the value of its customers.

But can a non-monetary management information system guarantee financial success and shareholder value? Yes, as WM-data , one of Europe´s most successful computer companies, shows, it is possible to create superior share holder value by focusing on the intangible rather than the tangible assets.

Measuring in a general sense involves trying to identify the flows that change or otherwise influence the market value of the assets shown in the figure. If we disregard the ordinary visible balance sheet, we are left with three quantities to measure: external structure, internal structure and competence of personnel.

Having read this far it is high time to ask yourself: 
WHY do you want to measure Intangible Assets. What is the purpose of it, anyway? Read Measuring the Wellsprings of Knowledge

On the surface of it The Intangible Assets Monitor is similar to the Balanced Score Card introduced by Kaplan and Norton 1996. Read more about similarities and differences between BSC and the Monitor.