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Transportation Research Procedia 63 (2022) 2099–2106

X International Scientific Siberian Transport Forum

X International Scientific Siberian Transport Forum
Intellectual capital by digital companies
Intellectual capital aby digital companies
Larisa Kokha*, Yuriy Kokha
a
Larisa Kokh *, Yuriy Kokh
a
State Marine Technical University (SMTU), 190121, Lotsmanskaya Ulitsa, 3, St. Petersburg, Russia
a
State Marine Technical University (SMTU), 190121, Lotsmanskaya Ulitsa, 3, St. Petersburg, Russia

Abstract
Abstract
The purpose of the paper is to develop an algorithm for assessing the cost of a company's intellectual capital, disclosing the
maximum
The possible
purpose of theinformation
paper is toabout
develop the IC
an components
algorithm for andassessing
their reliable value.
the cost ofToday, the question
a company's of the value
intellectual of the
capital, company's
disclosing the
maximum
intellectualpossible
assets isinformation
most relevant.aboutThistheisIC components
proven and their
by comparing reliable
their value.
market and Today, the question
book values. However,of the
thevalue of the
analysis company's
of the reports
intellectual
of the worldassets is most
leaders of therelevant.
digital This
economyis proven
provesby the
comparing
absencetheir
of anymarket and bookabout
information values.
IC.However, the analysis
In the paper, of the
intellectual reports
capital is
considered
of the worldasleaders
an integral
of theindicator, consisting
digital economy of many
proves heterogeneous
the absence components.about
of any information Basically,
IC. In ICs are assets
the paper, hidden capital
intellectual from the is
considered
investor. Anasinvestor
an integral indicator,
can only fantasizeconsisting of many
about their heterogeneous
structure and value. Anycomponents.
assumptions Basically,
about theICs costare
andassets hidden from
components of IC the
are
investor.
made by An
the investor
investorcan onlyonfantasize
based unverified about their
data. In structure and the
this matter, value. Any assumptions
investor can be easily about the cost and
manipulated. Thecomponents of IC the
paper proposes are
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made by of theICinvestor
and thebased
algorithm for calculating
on unverified data. both its matter,
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whole and its
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manipulated.substantiating the needthe
The paper proposes to
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introduceof IC and the
a section algorithm capital”
“Intellectual for calculating both itsreporting,
in the annual cost as a whole
where and its individual
the maximum components,
possible substantiating
information the needand
on the structure to
introduce
cost of IC acomponents
section “Intellectual capital” in the annual reporting, where the maximum possible information on the structure and
will be disclosed.
© 2022
cost of ICThe Authors. Published
components by ELSEVIER B.V.
will be disclosed.
© 2022 The Authors. Published by ELSEVIER B.V.
© 2022
This is The
an Authors.
open access Published
article
This is an open access article under by ELSEVIER
under the CC
the B.V. license
CC BY-NC-ND
BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
(https://creativecommons.org/licenses/by-nc-nd/4.0)
This is an open
Peer-review
Peer-review underaccess
under article under
responsibility
responsibility ofofthe CC BY-NC-ND
thescientific
scientific committee
committee license
of the (https://creativecommons.org/licenses/by-nc-nd/4.0)
of the
X X International
International Scientific
Scientific Siberian
Siberian Transport
Transport Forum Forum
Peer-review
Keywords: under
digital andresponsibility of the scientific
digitalized companies; transport; committee of theenterprises;
transport industry X International Scientific
intellectual capital;Siberian Transport
intellectual Forum assets;
assets; intangible
human capital;
Keywords: structural
digital capital; organizational
and digitalized capital; transport
companies; transport; client capital; value
industry of intellectual
enterprises; capital;capital;
intellectual digital companies.
intellectual assets; intangible assets;
human capital; structural capital; organizational capital; client capital; value of intellectual capital; digital companies.

1. Introduction
1. Introduction
Enterprises of the digital economy (digital companies) play an increasingly prominent role in the state economy
Enterprises
every of the
year. Digital digital economy
companies, (digital
as a rule, companies)
include enterprisesplay an increasingly
whose activities areprominent
impossiblerole in theinformation
without state economy and
every year. Digital
communication companies,(ICT).
technologies as a rule, include is
A company enterprises whose activities
a digital company, are question:
if for the impossible without
“Can information
a company carry and
out
communication technologies
its activities without ICT?”, the(ICT).
answerA company is a digital company, if for the question: “Can a company carry out
is “no” (https://diodeweb.files.wordpress.com/2017/08/diwkppr68-diode.pdf).
its activities14,
September without
1998 ICT?”, the answer
– a significant dayisin“no” (https://diodeweb.files.wordpress.com/2017/08/diwkppr68-diode.pdf).
the history of the world economy: Microsoft took first place in the ranking
September
by 14, 1998 – a significant
market capitalization, displacingdaythe in the history of
manufacturer of the
the world economy:
equipment Microsoft
General took
Electric. first place
Twenty in thelater,
two years ranking
the
by market
Top capitalization,
10 largest companiesdisplacing
by market the manufacturer
capitalization of the7equipment
includes General (Table
digital companies Electric.
1).Twenty two years later, the
Top 10 largest companies by market capitalization includes 7 digital companies (Table 1).

* Corresponding author. Tel.: +7-904-338-4237.

* Corresponding lkokh@mail.ru
E-mail address:author. Tel.: +7-904-338-4237.
E-mail address: lkokh@mail.ru
2352-1465 © 2022 The Authors. Published by ELSEVIER B.V.
This is an open
2352-1465 access
© 2022 Thearticle under
Authors. the CC BY-NC-ND
Published by ELSEVIER B.V.(https://creativecommons.org/licenses/by-nc-nd/4.0)
license
Peer-review
This under
is an open responsibility
access of the scientific
article under CC BY-NC-NDcommittee
license (https://creativecommons.org/licenses/by-nc-nd/4.0
of the X International Scientific Siberian Transport Forum )
Peer-review under responsibility of the scientific committee of the X International Scientific Siberian Transport Forum
2352-1465 © 2022 The Authors. Published by ELSEVIER B.V.
This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
Peer-review under responsibility of the scientific committee of the X International Scientific Siberian Transport Forum
10.1016/j.trpro.2022.06.235
2100 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106
2 Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000

Table 1. Top 10 companies in the world by market capitalization in 2020 (as of January 2021).

Place Name Market Book Company Industry

capitalization, value, bln.
bln.
1 Saudi Aramco $2 458 $1 880 Saudi Arabia Extraction, processing of oil and gas.
2 Apple Inc. $2 213 $324 USA Electronics, information technology
3 Microsoft $1 653 $304 USA Software development
4 Amazon Inc. $1 596 $321 USA Retail trade (sale of goods via the Internet)
5 Delta Electronics $1 435 $1 907 Thailand Electronics and automation.
(Thailand)
6 Alphabet Inc. (Google) $1 203 $320 USA Internet
7 Tesla, Inc. $834 $52 USA Motor industry and solar energy
8 Facebook $757 $159 USA Internet
9 Tencent $738 $174 China Conglomerate (social media, instant messaging,
media, web portals, mobile games, etc.)
10 Alibaba Group $620 $245 China Internet

Not a single company related to the digital economy was included in the Top-10 Russian companies by market
capitalization at the end of 2019. Yandex, Russia's largest digital economy company, ranked 11th with a capitalization
of just over $ 14 billion, which is 86 times less than Alphabet Inc. (Google). The next representative of the Russian
digital economy, Mail.Ru Group, ranked 27th with a market capitalization of about US $ 5 billion, while HeadHunter
took 62nd place with a market capitalization of US $ 1 billion. There are no other companies in the digital economy
in the Russian TOP-100 rating. However, the pandemic has made its own adjustments to the ratings.
At the end of 2020 in Russian’s Top-100, Yandex took the 8th place in the ranking of the largest Russian companies,
having increased its capitalization by one and a half times. The nineteenth place was taken by the OZON company,
while the Mail.Ru Group retained its place in the rating (27) (Table 2).

Table 2. Largest Russian companies by market capitalization at the end of 2020.

Place Name Market capitalization, bln.$ Industry

1 Sberbank 79.5 Banks and financial services
2 Gazprom 68.0 Oil and gas production and oil refining
3 Rosneft 62.5 Oil and gas production and oil refining
4 NOVATEK 51.6 Oil and gas production and oil refining
5 Norilsk Nickel 50.6 Metallurgy
6 LUKOIL 48.6 Oil and gas production and oil refining
7 Polus 27.7 Mining
8 Yandex. 22.1 Information Technology
9 Gazprom Neft 20.5 Oil and gas production and oil refining
10 Surgutneftegaz 17.4 Oil and gas production and oil refining
19 OZON 8.6 Information Technology
27 Mail.Ru Group 5.9 Information Technology

Top-100 Russian companies by market capitalization included eight companies in the transport sector of the
economy. All these companies represent the traditional economy and are classified as digitalized companies according
to the approach described in (https://diodeweb.files.wordpress.com/2017/08/diwkppr68-diode.pdf) (Table 3).

Table 3. Largest Russian transport companies by market capitalization at the end of 2020.

Place Name Market capitalization, bln.$ Industry

39 Sovcomflot 2.9 Transport
45 Aeroflot 2.4 Transport
46 PJSC «Novorossiysk Commercial Sea port» (NCSP) 2.1 Transport
64 Globaltrans 1.1 Transport
80 Global Ports 0.6 Transport
85 Far Eastern Shipping Company (FESCO) 0.5 Transport
96 Utair 0.3 Transport
100 Novorossiysk Grain Plant 0.3 Transport
 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106 2101
Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000 3

The market capitalization of a company directly depends on the market price of the companies' shares. The question
arises whether the market value of the company corresponds to its assets.
Enterprises in the oil sector of the economy and transport own expensive tangible assets. Fixed assets of the largest
transport companies by capitalization vary from 56% to 97%. (Table 4). Companies in the real sector of the economy
have an absolutely clear end product (oil, gas and refined products) or service.

Table 4. Share of fixed assets and intangible assets of Russian transport companies, 2020.

Name Fixed assets, % Intangible assets, %

1. Sovcomflot 82.4 0.04
2 Aeroflot 67.2 0.24
3 PJSC «Novorossiysk Commercial Sea port» (NCSP) 64.0 0.12
4 Globaltrans 87.0 0.001
5 Global Ports 71.6 0.91
6 Far Eastern Shipping Company (FESCO) 55.8 0.04
7 Utair 97.1 0.09
8 Novorossiysk Grain Plant 72.2 0.0

For world leaders in market capitalization, this asset is insignificant. Fixed assets account for less than 50% of the
assets of digital companies, while only Amazon Inc has this value reaching 47%, Microsoft - 20%, and Alibaba Group
- 9%.
According to financial statements, intangible assets of enterprises in the transport sector of the economy, as a rule,
are less than 1% (Table 4). Their innovative activities are rarely reflected in the financial statements.
At the same time, one of the distinctive features of digital economy companies, as noted by many researchers
(Martín-de Castro, 2014), is the change in the structure of the company's assets. Digital companies are characterized
by the dominance of the company's intellectual assets. However, according to financial statements, Apple Inc and
Amazon Inc do not have intangible assets, intangible assets of Alphabet Inc. (Google) and Facebook are less than 1%,
the share of intangible assets is not much higher for Alibaba Group and Microsoft. Only Tencent has a slightly different
asset structure: fixed assets make up 6%, and intangible assets 8% (Table 5). Thus, the analysis of the structure of
assets of digital economy companies proves their distinctive feature: a change in the structure of the company's assets.
However, the expected increase in the share of intangible assets in the financial statements of companies in the digital
economy is clearly not observed.

Table 5. Key financial indicators of the world leaders in the digital economy, 31.12.2020.

Name Market Book Fixed assets Intangible assets

capitalization, value,
billion $ billion $ billion $ ratio, % billion $ ratio, %

1 Apple Inc. 2 213 354 38 11 - -

2 Microsoft 1 653 304 62 20 6.5 2.1
3 Amazon Inc. 1 596 321 151 47 - -
4 Alphabet Inc. 1 203 320 97 30 1.4 0.4
(Google)
5 Facebook 757 159 55 35 0.6 0.38
6 Tencent 738 204 12 6 17 8.3
7 Alibaba Group 620 250 23 9 11.3 4.5

The conclusion suggests itself that intangible assets are only a meager part of a digital company's intellectual assets.
Many researchers argue that the intellectual capital of a company is the difference between the market and book
value of the company, but it is impossible to see this difference in the company's balance sheet. Comparing their
market and book values, it is possible to understand how large the intellectual assets of digital companies can be (Table
6). As can be seen from Table 6, the market value of companies is several times higher than the book value: from 6.3
times to 2.5 times.

Table 6. Comparison of market and book values of digital companies, 31.12.2020.

Name Market capitalization, Book value, Market capitalization / Book

billion $ billion $ value
2102 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106
4 Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000

1 Apple Inc. 2 213 354 6.3

2 Microsoft 1 653 304 5.4
3 Amazon Inc. 1 596 321 5.0
4 Alphabet Inc. (Google) 1 203 320 3.8
5 Facebook 757 159 4.8
6 Tencent 738 204 3.6
7 Alibaba Group 620 250 2.5

For digitalized companies, for example, transport industry enterprises, this pattern is not observed (Table 7).
Calculations have shown that the book value of transport companies in Russia exceeds their market capitalization.

Table 7. Comparison of market and book values of transport companies, 31.12.2020.

Name Market capitalization, Book value, billion Book value/ Market

billion $ $ capitalization
39 Sovcomflot 2.9 7.7 2.7
45 Aeroflot 2.4 13.8 5.8
46 PJSC «Novorossiysk Commercial Sea port» 2.2 1.1
2.1
(NCSP)
64 Globaltrans 1.1 1.3 1.2
80 Global Ports 0.6 1.3 0
85 Far Eastern Shipping Company (FESCO) 0.5 0.7 1.4
96 Utair 0.3 0.9 3.0
100 Novorossiysk Grain Plant 0.3 0.2 0.7

Consequently, when acquiring shares in digital companies, investors are mainly buying the company's intellectual
asset. But it is not possible to see this asset in the financial statements, to understand its structure and assess its value,
given the established traditions of presenting information to the investor. One of the fundamental principles of the
stock market functioning, information transparency, is violated. The information about the company that is available
to the investor does not meet his requirements and expectations regarding IC.
In the financial statements, there is only information on available intangible assets, but it is impossible to find their
structure and cost by component with the existing requirements for disclosure of information on intangible assets.
Annual reports reveal more than just financials. There you can find an overview of the company's business, main risks,
financial statements and comments to it, corporate governance. For example, every company that is listed on the US
stock exchange is required to file a Form 10-K to the SEC (Securities and Exchange Commission) annually. But there
is no information about the IC company in these reports!
Thus, the investor needs to have information about the components of the intellectual capital of digital companies
(about the structure of IC), their estimated value, i.e. the visible and estimated part of the IC. If we accept the hypothesis
that the IC of a digital company is the difference between its market and book values, then, having reduced this
difference by the total cost of the visible part of the IC, we will get an invisible (non-estimated) IC component. Having
received additional information, the investor will understand what exactly the digital company, of which he intends to
become a shareholder, owns, what is the cost of the IC, which can be estimated, and what remains in the “gray zone”.
The purpose of our research: 1) to propose a method for assessing the IC company as a whole; 2) propose the
structure of the IC from the position of its possible assessment; 2) propose methods for assessing individual
components of the IC; 3) propose options for disclosing information about IC in the reporting of digital companies.

2. Methods of research

In the course of the research, scientific publications concerning the problems associated with the assessment of the
components of intellectual capital were analyzed. The first deep studies related to the structure of the IC and its
assessment appeared in the second half of the 1990s. During this period, a rapid rise in the value of shares of high-tech
companies begins. For five years (from 1995 to 2000), the NASDAQ index rose from less than 1000 to more than
5000. On March 10, 2000, the index fell by 76.81%. By the end of 2001, most dot-coms had gone bankrupt, and the
stock prices of large Internet companies, such as Cisco, Intel, and Oracle, had lost more than 80% of their value
(https://www.investopedia.com/terms/d/dotcom-bubble.asp#citation-2). Investors have learned from the dot-com
 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106 2103
Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000 5

crash. Today, before investing in high-tech companies, an investor tries to collect as much information about the
company, its assets and development prospects as possible. However, modern requirements for information disclosure
do not affect one of the most important assets of the company - IC. Therefore, problems about the essence, structure,
assessment of IC, its impact on the efficiency and value of the company remain in the center of attention of specialists.
In the course of the research, such scientific methods as analysis, comparison, generalization, and grouping methods
were used.

3. Results

Analysis of the world's leading companies by market capitalization showed a clear advantage of digital companies,
out of ten – seven are digital. In Russia, this figure is much lower. Only in 2020, the Russian digital company Yandex
appears in the Top-10. Two other Russian digital companies, OZON and Mail.Ru Group, entered the top 30.
A comparison of the market and book values of the world leaders in the digital economy revealed a significant gap,
which is logically explained by the presence of intellectual assets in digital economy enterprises that are not reflected
in financial statements. The asset structure of digital companies has its own specifics. On the one hand, there is an
insignificant share of fixed assets, and on the other hand, according to the financial statements, there is almost complete
absence of intangible assets. However, all researchers acknowledge the presence of IC in digital companies. Thus, it
has been proved that in the presence of a large value of IC, it is impossible to find its structure and cost in the reporting
of companies. With today's reporting requirements for companies, this information is not disclosed.
Realizing that the IC of each digital company is unique, we propose to divide it into two groups: estimated and non-
estimated. Next, we determine the cost of IC as a whole using one of the existing valuation methods. Then we select
the IC components that can be identified and which cost can be calculated. Having summed up the cost of the measured
IC components, we subtract it from the total IC cost. Thus, the investor has information about the cost of the IC as a
whole, its separately assessed components, and, according to the residual principle, about the value of the non-
estimated part of the IC.
We propose to introduce a section “Intellectual capital” into the company's annual report, which will disclose
information that will allow an investor to make informed decisions on investing in a company, especially with a high
difference between market and book values.

4. Discussion

Before examining the structure of IC, it is necessary to reveal the essence of the definition of “intellectual capital”.
There are different points of view regarding the essence of this definition. However, as Stewart rightly noted (1997),
“Intellectual capital has been considered by many, defined by some, understood by a select few, and formally valued
by no one”.
There are many definitions of IC (Incze and Vasilache, 2019; Martín-de Castro, 2014; Kokh, et al., 2019). Klein
and Prusak (1994) defined intellectual capital as an intellectual material that can be formalized, collected, and used to
produce an asset with a higher value. Stewart (1997), Edvinsson and Malone (1997), and a little later Sullivan (2000)
and Khan (2014) understood intellectual capital as knowledge that can be converted into value or profit. A team of
authors from Greece (Dimitrios Maditinos, Dimitrios Chatzoudes, Charalampos Tsairidis, Georgios Theriou) came to
the conclusion that intellectual capital should be understood as a hidden value that is not reflected in financial
statements and which leads to a company gaining a competitive advantage (Maditinos, et al., 2011). In our study, we
adhere to the views of our Greek colleagues and consider the IC as an integrated indicator consisting of a large number
of separate, usually unrelated components. These components are not disclosed in the financial statements, but they
affect the market value of the company and its competitiveness.
Let’s consider the components of the IC. As a rule, most IC researchers are divided into two groups. The first group
adheres to the IC model, which includes three components: human capital, structural capital, and organizational or
client capital (Nedjati and Izbirak, 2013).
The second group also distinguishes three components, two of which are human capital and structural capital, and
the third component is relational capital.
2104 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106
6 Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000

Work by Abdullah N. A. Alkhateeb, Liu Yao and Cheng Jackkie, called “Review of Intellectual Capital
Components Research” and published in 2018 in Journal of Advanced Social Research, summarizes the views of many
scientists about the components of IC. The authors built an extended IC model, including the following components:
human capital, structural capital, relational capital, social capital, technological capital, spiritual capital, renewal
capital, trust capital, entrepreneurial capital.
The content of each component is discussed in detail by the authors of the IC models.
In our opinion, each enterprise has its own IC components. Their number depends on the specifics of the enterprise.
We set ourselves the goal of disclosing information about the IC structure and assessing its components. For this
purpose, we will use the following algorithm.
At the first step, the total IC value is calculated by some method. In a second step, the individual components, or
usually subcomponents, that can be estimated are highlighted. In the third step, the subcomponents are estimated. At
the fourth step, the “visible” part of the IC is subtracted from the total value of IC as the sum of the cost of the estimated
subcomponents. Thus, the investor has information about the cost of IC, about the cost of its visible and invisible
(gray) parts.
So, at the first step, it is necessary to determine the total cost of all IC components, i.e. the cost of IC. The most
complete overview of existing approaches to the assessment of intellectual capital is presented on the personal website
of Karl-Erik Sveiby (http://www.sveiby.com). He grouped all methods into 4 groups:
 Direct Intellectual Capital Methods;
 Market Capitalization Methods;
 Return on Assets Methods;
 Scorecard Methods.
These methods are described in detail in the works of K. Sveiby himself (http://www.sveiby.com), as well as in
(Incze and Vasilache, 2019). All methods described in these works have advantages and disadvantages.
For the purposes of our research, we propose to define the cost of IC as the difference between the fair value of a
digital company and the value of long-term assets (excluding intangible assets) owned by the company:

 =  − ( − )

IC - intellectual capital
FV - fair value of the company
LTA - long-term assets
IA - intangible assets
We propose to calculate the fair value of the company using one of the methods of the income approach,
specifically, the method of discounting cash flows. The correctness of the value obtained using the income method
can be assessed using a comparative approach, for example, through multiples for peer companies.
Long-term assets in the balance sheet of digital companies are represented by long-term financial investments, fixed
assets and other long-term assets. All components of non-current assets are recorded in the balance sheet in accordance
with the requirements of IFRS (or GAAP) either at fair value or taking into account asset impairment. Their value in
the balance sheets of digital companies is insignificant (Table 8).

Table 8. The structure of long-term assets of digital companies, 31.12.2020.

Name Book value, Fixed assets Financial investments Other assets

billion $
billion $ ratio, % billion $ ratio, % billion $ ratio, %
Apple Inc. 354 38 11 100.9 28.5 34.0 9.6
Microsoft 304 62 20 3.7 1.2 13.6 4.5
Amazon Inc. 321 151 47 3.2 1.0 14.6 4.5
Alphabet Inc. 320 97 30 20.7 6.5 5.0 1.6
Facebook 159 55 35 6.2 3.9 2.8 1.7
Tencent 204 12 6 109.9 53.8 9.3 4.6
Alibaba Group 250 23 9 65.2 26.0 14.9 6.0
 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106 2105
Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000 7

So, at the first step, we determined the total cost of the IC that can be disclosed to potential investors.
Investors are also interested in the structure of the IC, the composition of its components.
The IC includes intangible assets, the value of which is reflected in the balance sheet. Unfortunately, not all
intangible assets can be seen in the financial statements of an organization. Intangible assets are assets of digital
companies. Therefore, they must arise from past events, have the potential to bring benefits in the future, and are under
the control of the company. While the first two requirements are feasible for most of the IC components, then the last
requirement poses big problems. It is the latter requirement that cuts off human capital from intangible assets, since
employees do not belong to the company and are not under its control. Therefore, the main component of IC of digital
companies – human capital – remains outside the scope of financial reporting.
An intangible asset can be identified as an asset arising from a contractual or other type of legal right, for example,
a license, an asset sale and purchase agreement, a gift agreement, patents, licenses, etc. If this is an acquired asset, then
it has a price, it can be reflected in the balance sheet. If an intangible asset is created within the company, then a
number of problems arise with its identification and valuation. If the company implements an innovative project, then
this project will be reflected in the financial statements only if it is feasible, i.e. there is a high probability of an
innovative product as a result, expedient, has the resources that guarantee its completion, and there is a clear plan for
the completion of the project. The stages of research and the first attempts to create an innovative product are not
included in the cost of intangible assets. Thus, completed projects identified as intangible assets can be listed as visible
part of the IC. Information about unfinished projects will also be useful for the investor. Therefore, we propose to
create the section “Intellectual capital” in the annual report, which will, firstly, indicate the cost of the IC. Secondly,
the structure of the IC is presented from the perspective of disclosing information on the cost of subcomponents. The
first component of IC is the intangible assets recorded in the statement of financial position of the company. The least
questions arise regarding this part of the IC. All information about intangible assets is taken from accounting data.
The second component of IC is intangible assets that, according to accounting rules, are not reflected in the financial
statements. From the point of view of IFRS (or national standards), intangible asset is an asset of the company when
the investor is sure that the company owns this asset. However, many investors want to buy shares of the company
precisely because the company is implementing many projects, the results of which in the future will become new
innovative products, services or technologies. For now, this information is closed to the investor. We propose to
disclose data on ongoing projects. Thus, the second component of the IC is the R&D costs for projects at the initial
stages of development, indicating the costs incurred by the company for each project. By comparing such information
in dynamics, an investor can track promising projects and make decisions about investing in a company at an earlier
stage in the implementation of innovative projects.
The third component is related to intangible assets that are created by the company itself, but are not reflected in
the balance sheet, since they are not intangible assets according to accounting requirements. Digital companies have a
large number of created programs and innovative developments for internal use. All this is the IC of a company, and
an investor should know about it. It is possible to estimate the value of such intangible assets in a costly way.
Traditionally, government agencies are involved in the registration of patents, computer programs, etc. For example,
in the Russian Federation, this is the Federal Service for Intellectual Property (Rospatent). Registration of an invention
is a rather lengthy and regulated process. We propose to organize a system of internal registration of inventions. Within
the company, a special unit will promptly register objects of intellectual property for domestic consumption.
Generalized information with reasonable for the investor detailing of this kind of intangible assets can be presented in
the company's annual reporting in the section “Intellectual capital”.
In addition to their own developments, digital economy companies are pursuing an active policy of purchasing
promising start-ups. Without disclosing the amount of the transaction, if it is a trade secret, in the section “Intellectual
capital”, it is possible to give information about new products, services, technologies that will appear in the company
thanks to the purchased start-ups.
The most important component of IC is human capital. When analyzing the IC, first of all, analysts pay attention
to human capital, since it is the key driver of growth in the value of the company. Human capital includes knowledge,
experience, and skills that employees of a company have or acquire.
Human capital is used in the activities of the company. However, it does not belong to the company, but to its
employees. Employees can move to another company at any time, and together with them the knowledge, experience
and talent that these people possess will move to another company. It is difficult to assess the future benefits of human
2106 Larisa Kokh et al. / Transportation Research Procedia 63 (2022) 2099–2106
8 Larisa Kokh et al / Transportation Research Procedia 00 (2022) 000–000

capital (Zambon, 2017). These features of human capital do not allow us to consider it as intangible assets and
contributes to the allocation of human capital into a separate group. Attention should be paid to the fact that human
capital is not just a collection of knowledge, experience and talent of a particular employee. A synergistic effect is
inherent in collective work, which greatly increases the effectiveness of the individual contribution of each participant
to the overall result. Studies by many scientists (Swart (2006), Namazi and Abrahimi (2007), Ahangar (2010), Taie
(2014)) have shown that human capital is the main source of innovation in companies, and a positive relationship
between human capital and the efficiency of the company has also been proven (Tarus and Sitienei, 2015).
From the above, it follows that human capital, on the one hand, is the most important component of IC, on the other
hand, human capital is not reflected in the financial statements of companies. In this regard, it becomes necessary to
disclose information to investors about the potential of the company's human capital. To solve this problem, we
propose to provide the following information in the “Intellectual capital” section of the annual report:
 age of employees;
 level of education;
 average level of basic wages;
 range of additional payments to wages.
In addition to this information, it is advisable to show the expenses of the enterprise for the training of its employees.

5. Conclusions

Digital companies are the engines of the modern economy. They are especially attractive to investors today. Digital
companies occupy 7 positions in the Top 10 global companies in terms of market capitalization. Their market value
significantly exceeds the book value (from 2.5 to 6.3 times). The gap between the market value and the book value of
companies in the digital economy demonstrates that they have a large amount of hidden assets, which are identified
as intellectual capital. However, there is no IC in the financial statements. Investors do not know its structure, it is
difficult to reliably assess the cost of IC, its potential, its impact on the cost and efficiency of the company. Therefore,
it is necessary to supplement the company's reporting to disclose information on the IC. It is recommended to introduce
a section “Intellectual capital” in the annual reporting. The information that is disclosed to investors in this section
should show the cost of intellectual capital, its structure and the cost of IC components.

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