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A Knowledge Organisation normally has rather few tangible assets. Some computers perhaps, but even the office space is often on lease. Tangible assets are owned by the company and usually the only assets that the accountants are allowed to bring into the Balance sheet. The real assets of a Knowledge Organisation are mostly intangible.
What is the market value of intangible assets? Many have tried to answer to that question. None has found a good answer. The problem is that the value of intangible assets can not be displayed in normal market transactions, like physical goods. That there is a value everyone agrees. However, the value is shown only indirectly:
The Balance sheet of the Knowledge Organisation consists of a tangible/visible part and an intangible/invisible part.
The tangible/visible part is the "normal" balance sheet which one can find in the Annual Accounts. It shows the tangible assets and how they are visibly financed.
The visible finance is generally quite simple in a Knowledge Organisation. Short term debt, some long term loans and shareholders equity. Long term loans are often difficult to get since the banks tend to frown at the collateral (the few tangible assets).
Intangible assets are not very liquid and unlike the fixed assets they are both owned and not owned by the company. The simulation model counts with three kinds of intangible assets, the Corporate Knowhow, the Corporate Image and the Competence of the Personnel.
Their counterpart on the finance side is mostly an invisible equity. Since banks are unwilling to lend money to investments in intangible assets, most of the business development is self-financed.
There are few machines except the employees, the key people. The research engineers, the programmers or the consultants are the "machines" of the Knowledge Organisation. The members of the personnel thus make up the problem solving Competence.
The Competence of the Personnel is of course not "owned" since the people are voluntary members of our organisation. However, there exists a bond of loyalty between the personnel and the company, created by ethics and culture which acts as a "glue". People tend to feel a certain amount of loyalty if treated with honesty. Therefore, competence has a value also for the company, even if it is not owned in an ordinary sense. The company therefore often agrees to pay an amount of money in case of redundancy.
This obligation is not entered into the books but is a kind of obligation. One might compare it with the obligation of a lease contract. This unpaid obligation is an invisible finance too.
All assets mentioned above will be handled during the simulation. The total Market Value is calculated in the simulation and used as a measure of success.
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