pensed the whole amount. SummaryMarket-to-book ratios indicate that IC is undeniably important in the modern economy. Since accounting is a science of observation and things are changing constantly, accounting must adapt to these changes by observing firms in new, more revealing ways.However, many questions arise in designing an IC report sheet. For example:1. Will IC measurements and disclosures reveal too much to competitors?2. If there is too much subjectivity, will managers pressure accountants to make the IC numbers look better than they really are? 3. What about stockholder lawsuits over inaccurate measurement of IC?4. Is it too difficult to obtain the information required for the IC report?The Edvinsson/Malone framework has some features that can better aid investors and managers in assessing knowledge capital, thereby bringing stability to this highly turbulent area. However, the Edvinsson/Malone framework contains some frivolous aspects that should be removed. The framework serves as a good starting point from which refinement may occur.ConclusionThe Edvinsson/Malone framework needs to be refined. The authors included frivolous materials such as gender ratio of managers and number of laptops and computers per employee. These measures do not incorporate with the definition of IC outlined in the beginning of this report.References...
