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Paper info: How do finance and accounting perceive relationship value?

Title


How do finance and accounting perceive relationship value?

Authors


Agnes Wimmer, Helena Naffa, Linda Wimmer and Tibor MandjŠk

Place of Publication


The paper was published at the 25th IMP-conference in Marseille, France in 2009.

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Abstract


Introduction††In the field of financial accounting, numerous studies were published that dealt with valuation. These highlighted the paradigm clash between accountants - proponents of historical value  and financial analysts preferring the future cash flow generation mechanism (Barberis and Thaler 2002).†The value beyond financial statements insinuates that value exists beyond what is recorded in the books of a company. Usually, such "assets" are not owned, nor possessed, but rather they are an attribute that can be managed. Therefore, quantification poses a severe problem  a problem that w shall not attempt to tackle in this paper. Rather, we wish to draw attention to the importance of such assets, which, we will attempt to organise into a framework that fits the traditional firm valuation mentality that economists are familiar wit†Quasi-AssetsStrategy, corporate culture, business relationships and human resources are the most important quasi-assets that an enterprise "possesses." As introduced above, these invisible elements are "quasi" assets as their property does not allow them to be actually owned by the companies. They are rather attributes, intangible relations that have the power to influence performance. There are four invisible assets. These invisible assets could be set in a framework for valuation purposes.The paper proposes a simple but comprehensive logical model for the valuation of these quasi-assets.†Beyond the valuation problem of these quasi-assets there is a more general question. How can we evaluate knowledge itself? What does† knowledge mean for an organisation? What is the role of tacit knowledge and how is it possible to mange it? The problem of management assumes the question of measuring. How could tacit knowledge be measured by the financial and the accounting tools?