Chapter 10

Focus on Nonfinancial Information

Many scholars and professionals argue for the increased role of intangibles and nonfinancial indicators in evaluating the corporate performance. At the same time, scholars and professionals also observe a problem with these measures: lack of consistency. Variety of aspects that can be measured, different scales of measurement, different timeframes, and other issues cause confusion instead of improved understanding of the company’s business.1 Thus, it becomes essential to analyze and classify what exactly is meant by intangibles.

Intangibles and nonfinancial indicators are often used interchangeably. In fact, indicators that measure intangibles are often called nonfinancial indicators. It is important ...

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