The changing paradigm from labor based business to knowledge based
business has made an inclusion of human resources into an income
statement. Among intangible assets, human resources, which is called
intellectual capital (IC), becomes the core asset in a company.
IC consists three basic elements, they are human capital, structural
capital and customer capital. In fact, these are the real power of the
company in producing, developing, and bringing the company to the
future. Accordingly proponents agree to disclose these on the income
statement. Unfortunately, accounting practice has not accounted for them.
Whilst, IC describes the creation values, accounting practice does not have
tools to identity, measures and disclose them on the annual reports.
Therefore this research attempts to provide ideas and open nuance for
accountants.
This research employ a thick library research, an alternative research
methodology that suitable to answer the research question. This research
is conducted in depth discourse producing some methods for measuring
and reporting IC that are practiced recently.
The study concludes that methods of measurement IC have been
classified into a financial and non-financial measurement. For the
reporting purposes, it is needed a supplement to the income statement
consisting an intellectual capital statement.