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Intellectual Capital

By December 21, 2018 No Comments

Intellectual Capital refers to the collective knowledge (whether or not documented) of the individuals in an organisation or society. This knowledge can be used to produce wealth, multiply output of physical assets, gain competitive advantage, and/or to enhance value of other types of capital. Intellectual capital is now beginning to be classified as a true capital cost because (1) investment in (and replacement of) people tantamounts to investment in machines and plants, and (2) expenses incurred in education and training (to maintain the shelf life of intellectual assets) are equivalent to depreciation costs of physical assets.

Source: http://www.businessdictionary.com