Human Capital and its Valuation

Human Resource is a key and valuable asset for any organisation. During the last decade the employers have come to knew the importance of the Human Resource. The human resource employed by some of the organisations has been created,valued and recognised in the books of accounts as an asset. Lev and Schwartz have invented the formula for the valuation of human resource which is popularly known as Lev & Schwartz model of HR Valuation

1. How far it is justified?

2. Does the State of affairs of such an organisation may be said to be depicting true and correct view?

3. Is it not arbitrary to assign a value for an asset which the other organisation do not take into account?

We can discuss the above in the academic interest.

Replies (3)

in my opinion its not justified to record the value of HR in books of a/cs as no universal formula of its valuation can be given by any body based on certain assumptions.

Infosys Technologies Limited has valued and created the HR as an asset in its Books of Accounts.

They might have, but it will be difficult to put value to human asset which is invaluable. It is just as saying that in the sky there are 10000000000000000...... stars. No one will be able to verify it.

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