Using content analysis of annual reports of the top 20 firms (by market capitalization) listed on the Australian stock exchange in 2004, this paper describes the state of intellectual capital reporting practices in Australia. The paper also compares the results with a previous Australian study by Guthrie and Petty (2000) and reconfirms that reporting of intellectual capital is yet to be done within a consistent framework. The IC reporting examined was not structured and systematic. There is still no established and generally accepted Australian framework for IC reporting, which could be a reason for inconsistency. Of the IC-related information reported, 73% was in qualitative terms, which essentially creates difficulty in setting benchmarks for managing, measuring and reporting IC performance. External capital was the most reported category, with 48% of the overall IC reporting in this category. It was followed by internal capital with 31% and human capital with 21%. When compared to previous studies, the descriptive statistics show that there has been a modest increase in IC reporting. However, the increase in quantitative reporting is remarkable.
This article originally published as Sujan, A and Abeysekera, I, Intellectual capital reporting practices of the top Australian firms, Australian Accounting Review, 17 (42), 2007, 71-83.