The role of human capital cost in accounting
The purpose of this research is to deal with the human capital disclosure issue of present accounting systems. Many companies nowadays derive their competitive advantages mainly from human capital. However, under generally accepted accounting principles, all human‐related expenditures are treated as expenses, which are deductions of revenues, thus misleading decision‐makers into inappropriate judgments. This paper provides an alternative way of measurement and disclosure of human capital items in financial statements. The paper defines and classifies the human capital of a company in line with a theoretical framework provided by the authors, sorts out company's human capital investments according to cost development stages in human resources, isolates human capital from expenses and finally suggests disclosure in financial statements.
Year of publication: |
2004
|
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Authors: | Ming Chen, Hai ; Jun Lin, Ku |
Published in: |
Journal of Intellectual Capital. - Emerald Group Publishing Limited, ISSN 1758-7468, ZDB-ID 2024939-1. - Vol. 5.2004, 1, p. 116-130
|
Publisher: |
Emerald Group Publishing Limited |
Subject: | Competitive advantage | Human capital | Expenditure |
Saved in:
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