I would be grateful if recipients could circulate this advert to anyone
they think may be interested. Many thanks.
I have been awarded funding by the British Library Research and Innovation
>Centre for a one year project evaluating methods of valuing information
>assets in companies. A brief description of the project is given below.
>
>I am seeking a Research Assistant to work on this project. There is a
>little flexibility on the start date, but ideally the person appointed will
>be starting the work by March 1 1999 at the latest. The salary will be on
>the RA I scale.
>
>The person appointed will have either a qualification in librarianship,
>information science or a related discipline, or in accounting or a related
>discipline. In the case of a candidate with LIS qualifications, knowledge
>of accounting would be an advantage but is not essential as training can be
>given at the start of the project by Professor Dick Wilson of the Business
>School, who is associated with this project.
>
>Applications should be made by submitting a c.v. and a covering letter. The
>closing date for such applications is 16 OCTOBER. If you wish to discuss
>the post informally before then, feel free to contact me by e mail or phone
>
>THE PROJECT
>
>Three methods recommended by the UK Accountancy Standards Board for valuing
>information as an asset in organisations will be tested in two companies.
>By "information as an asset", we mean the stock of information stored plus
>accumulated expertise in ability to access and interpret information; it
>does not include space and physical resources, such as hardware and
>software, devoted to information storage and retrieval. The results will
>be used to assess, for the first time, using the standards recommended by
>UK accountancy practice the importance of libraries and information units
>to the balance sheets of UK companies. The research will also help to
>assess the level of understanding and effort needed to carry out such
>valuations routinely. In short, the research will assess how easily
>information fits into the new UK accounting standard for intangible
>assets, FRS10 (1997).
>
>Libraries and information units are often viewed as an overhead by
>companies, and are therefore in danger of having their funding cut when
>organisations need to cut costs. In recent years, however, there have been
>attempts to develop the concept of information as an asset, and for
>companies to place a book value on information assets in a manner analogous
>to placing a book value on other intangible assets, such as Registered
>Trade Marks. If information assets, including those held by libraries and
>information units, can be valued and accepted as assets on a company's
>balance sheet, the general acceptance of information as an asset will be
>accelerated. Therefore, the likelihood of those libraries and information
>units suffering cuts in the future will be diminished. Furthermore, if
>the practice and methodology of valuing libraries in commercial companies
>become accepted, then the valuation of libraries' contribution in other
>organisations, such as the public sector, becomes more likely.
>
>The aim is to clarify the need, and popularise the techniques, for
>valuing information assets in general, and libraries in particular, in
>companies to provide the evidence for decision makers to make rational
>decisions regarding their information assets.
>
>The objectives of the research are:
>
>… To assess the understanding of information asset valuation in UK
>companies, and by accountants.
>… To identify the issues that arise when attempting to value information as
>an asset.
>… To evaluate the three recommended methods in FRS10 of valuing
>information as an asset in the companies.
>… To carry out an assessment of the value of the library/information units
>in the companies under study by comparing the total value of information
>assets to those held in the library.
>
>The results will lead to an understanding of the pros and cons of the three
>recommended methods for valuing information assets within British
>companies, and will help promote the need for such valuations. This, in
>turn, should lead to greater emphasis being placed on the value of
>libraries and information units, and will also lead to a greater
>recognition generally of the value of information. The results would be
>used by companies when valuing information assets. The results will also
>be used by senior management in those companies to persuade the board that
>information should be included as an asset and appear on the balance sheet.
>
>The results of this research will show how companies currently spend money
>on information; this will help decision makers make rational decisions
>regarding future expenditure on information resources. The research may
>demonstrate that some companies over-provide information resources and may
>therefore be able to save costs by, say, accessing, some shared facility.
>In other words, the research will point the way to more cost-effective
>information provision.
>
>Intangible assets have always caused problems for accounting practice. The
>traditional view hitherto has been that intangible assets comprise:
>goodwill; trade names and Registered Trade Marks; and patents.
>
>However, information, it has long been argued by those in the library and
>information professions, can also be considered an asset. Information
>Resource Management (IRM) states that (like other resources) its value
>can be identified, gaps and duplication in the resource found and the use
>of the resource maximised . However, information managers have found it
>difficult to persuade senior management that information should be
>capitalised on company balance sheets.
>
>In the last few years, a shift in attitudes has become obvious. This can
>be attributed to five factors. The first was the work of the Hawley
>Committee , which, with the backing of the CBI, showed that information is
>a vital resource and that someone at Board level should be responsible for
>its management.
>
>Secondly, in 1995, Reuters published Information as an Asset: the invisible
>goldmine , which reported the results of 500 telephone interviews with
>senior managers in UK companies The main conclusions of this report, which
>received wide publicity, were that one in four UK companies said that
>information was its most important asset; half thought it was more
>important than trade names and Registered Trade Marks; and one in ten
>valued its information more than its staff. However, more than 40% of
>respondents said their companies had not woken up to the value of their
>information. The results showed that companies want to capitalise their
>expenditure on information: one in six already did so at the time of the
>research, and a further 10% hoped to do so in the near future. However,
>25% of the respondents said they could not capitalise information assets
>because they found it too hard to identify what the value of the assets
>were .
>
>The third reason was the publication of Intellectual Capital . In the past
>year, this book has become one of the most quoted management books. The
>term "intellectual capital", first coined by the economist John Kenneth
>Galbraith, is a combination of information, attitudes and experience. The
>idea was popularised by Thomas Stewart in an article in Fortune in 1991.
>The fourth development was a recent survey (September 1997) undertaken by
>the Institute of Management. They asked 3,000 of their members to detail
>their understanding of, and experiences with this concept. Only 6% of
>respondents thought that "intellectual capital" was just another management
>fad, and more than 75% thought it would ensure organisational survival.
>More than half, however, said there was no attempt to measure intellectual
>capital in their organisations. The final development is due to Skandia
>Insurance Company. It has been transformed in recent years into one of the
>largest and most profitable insurance companies in the world. It ascribes
>its success to its understanding of intellectual capital . This assertion
>has been widely accepted by financial journalists. Skandia states that
>"activities are currently being carried out at Skandia to develop a
>complementary accounting taxonomy." Shareholders receive a special report
>with the annual report, describing the capitalisation of Skandia's
>information resources. Skandia also states "A true and fair view of
>Skandia's development requires a broader description of our business than
>can be read in our financial accounting."
>
>The reason for the research proposal is the publication of a new
>accounting standard for intangible assets. This requires that from the end
>of 1998, UK companies must capitalise their intangible assets (defined as
>non-financial assets that have no physical substance but are identifiable
>and are controlled by the company through custody or legal rights) as long
>as they have "readily ascertainable market value". The valuation can be by
>one of three methods: the amount it could be sold for; the difference
>between cost and fair value if it has been purchased; or by reference to
>any active market where frequent buying or selling of such assets takes
>place. Such intangible assets should be amortised over their useful
>economic life, and the process must be used for any company accounts filed
>on or after 23 December 1998.
>
>With advice from Professor Richard Wilson, Professor of Business
>Administration and Financial Management, the Loughborough University
>Business School, the following tasks will be carried out:
>
>… Review the literature of the valuation of intangibles, and of the concept
>of information as an asset. Standard bibliographic tools covering the
>information science, information management and accounting literature will
>be used; sources checked will be both print and electronic.
>… Review the literature of, and interview relevant professional
>associations, company accountants and accountancy firms regarding
>information resources as an intangible asset. We will target Skandia in
>particular. Survey the chosen company managers to assess their
>understanding of information as an asset and intellectual capital by in-
>depth interviews. Review the literature of, and interview the same
>professionals regarding the advantages and disadvantages of the three
>proposed methods for valuing intangibles when applied to information assets
>… Run a trial with two companies which agree to have their information
>assets valued using the three specified methods. Analysis of the pros and
>cons of each method. The companies will be in the market research and
>management consulting fields.
>… Development of a workbook based on recommended method of valuation.
>… Use focus groups to assess the validity of the interim and final results.
>… Use an Advisory Committee to advise on all aspects of the project.
Professor Charles Oppenheim
Dept of Information and Library Studies
Loughborough University
Loughborough
Leics LE11 3TU
01509-223065
Fax 01509-223053
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