The reporting and recognition of human resource assets in recent Australian IPOS

Abstract

While intangible capital (IC), including human resources (HR), are recognised as being important in creating competitive advantage for organisations (Nishii, Lepak and Schnedier, 2008) there remains very uneven measuring and reporting of the firm’s IC as highlighted in recent studies (Rimmel, Nielsen and Yosano, 2009; Singh and Van der Zahn, 2007). The growing disclosure of IC is expected to provide the information that capital market participants find important in terms of making informed investment decisions (Abhayawansa and Guthrie, 2010). In this context initial placement offer (IPO) prospecti would be expected to provide more information and details on a company’s long term strategy, including their intangible assets (Rimmel et al., 2009).This paper reviews the reporting of intangible capital, specifically HR, from the propsecti for six Australian companies that listed in 2010 and 2011. Following on the research of Bukh, Nielsen, Gormsen and Mouritsen (2005) we apply a template to the public documents in order to reveal the extent and the detail of the HR reporting. The findings reveal limited HR reporting; limited strategic plans for the development of HR assets and very uneven reporting across the prospecti.