Similarly, it is the smaller amount of human competence that is directed inwards that creates, maintains, develops or erodes the organization s internal structure. Individual competence is people s ability to act in various situations. It includes skill, education, experience, values and social skills. Competence cannot be owned by anyone or anything but the person who possesses them, because when all is said and done employees are voluntary members of the organization. A case can, however, be made for including competence in the balance sheet, because it is impossible to conceive of an organization without people.
People tend to be loyal, if they are treated fairly and feel a sense of shared responsibility.
That is why companies are generally willing to pay some kind of compensation to those who retire, or have to be laid off. Although such commitments are not recorded as liabilities in the balance sheet, they can be seen as pledges or commitments, like leasing or rental contracts, and thus a form of invisible financing of employee competence. Create your own firm's Invisible Balance Sheet on the interactive page. Then come back here and continue with The Intangible Assets Monitor below. The Intangible Assets Monitor is a method to follow up the Intangible Assets and a presentation format.