The Effect of intellectual capital on a firms value and an application

ABSTRACT THE EFFECT OF INTELLECTUAL CAPITAL ON A FIRM'S VALUE AND AN APPLICATION Today, it is widely accepted that we have entered a new age called "knowledge era" whose indicators have strongly emerged through developments in technology and communication. Extraordinary developments in sharing and developing knowledge, which have emerged with new era, oblige reexamining many traditional doctrines. Business management is perhaps one of the areas which feel effects of the new age most. Knowledge has been most important value component of today's businesses. The more businesses will use knowledge components they possess, the more they will have ability to remain in competition environment of the new era; and the more quickly they will realize this need and fulfil necessities about it, the more they will gain competitive advantages against their competitors. Businesses, which have intensive knowledge components, have been valuable in market more than they have ever been. Market has paid the most premium to knowledge substructure of businesses called "intellectual capital" which includes human resourses, relations and processes of business, any more. Traditional business valuation, which is based on tangible assets on a large scale, cannot completely meet the need of valuation based on intangible assets which have a big role on business value in knowledge era. The aim of modern businesses is to maximize shareholder value. Reaching this aim can be possible only by realizing, revealing, measuring and reporting; briefly managing intellectual capital they possess. HI