Are there examples of knowledge being appraised as an asset using GAAP?
At UPS it is a common practice for truck loaders and drivers to record loading techniques or route tips they’d developed over the years. Since these artifacts were not identified, catalogued, or valuated, they usually disappeared when employees left the company or went on leave. Now that tacit knowledge has been captured and is accessible in a central system. This UPS anecdote underscores the concept of Knowledge Asset Management using knowledge capital valuation techniques. UPS was not trying to manage general “driver/loader knowledge” just their tacit knowledge about specific techniques and routes. To assemble this knowledge artifact required a $600 million route optimization system investment.
That’s the top book value of this artifact. The ability to share this knowledge shaved off a documented 1-million miles per month of wasted driver/loader time. At x-dollars per mile, the market value of this artifact can be calculated using Net Present or Future Value formulae. Of course, there is no guarantee that this 1-million per month metric will remain constant. The cost savings can fluctuate much the same as dividends from stock. But the point is that UPS could, if desired, calculate both the market value and future opportunity value of this “driver/loader knowledge” artifact. With that ability UPS has transformed the tacit knowledge of their drivers/loaders into implicit knowledge that can be valuated using Generally Accepted Accounting Practices.
DHL, on the other hand, chose to lay off thousands of employees and shut down all but its international operations in Wilmington, OH. How many of these employees took valuable knowledge assets out the door with them? If only one-in-ten had knowledge that could have helped DHL survive the current recession and even thrive on it–how many billions of dollars would that knowledge have earned over the next couple of years?