This is a question for students of commerce stream. Human resource is not shown as an asset in the balance sheet; though managers claim that it is the most important asset of an enterprise, especially the service oriented enterprise. What could be the reasons for not recognizing human resource as an asset on the balance sheet?

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Amit Khare

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This is due to the following reasons : 1. The basis for determining the Value of this Asset. 2. Absence of any existing accounting standards for the same, 3. The possible tax implications.
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expert in project works

Because people cannot be depreciate, owned. Peoples are treated as intangible asset.
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Accounts Coaching

Because of Money Measurement Principle only those transaction and events are recorded which can be valued in terms of money.
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PGT ACCOUNTS

Because it's not having any monetary value or not having financial characters
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PGT ACCOUNTS

No financial characters
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Because of 'Money Measurement Concept' which states that only the transactions and events that can be measured in monetary terms are recorded in the books of accounts.
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CA. RK Sahoo

Human can't be converted into money, that means we are not able to evaluate the monetary value of human.
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Human Resources are not recorded directly. Good employees benefit organization in many ways. Post-sales client relationship, financial records and statements and many more things. So, it is recorded in form of goodwill. I am not sure whether intelligent people here may agree with me or not. But still,...
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Human Resources are not recorded directly. Good employees benefit organization in many ways. Post-sales client relationship, financial records and statements and many more things. So, it is recorded in form of goodwill. I am not sure whether intelligent people here may agree with me or not. But still, i seek their expert opinion. Thanks read less
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Commerce Solutions

Human resource is definitely the most important asset of any organisation. It channelize the other assets as well.The conventional accounting practice does not allow non measurable items in balance sheet. Slowly corporate world is recognizing the importance and role of human resources which results to...
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Human resource is definitely the most important asset of any organisation. It channelize the other assets as well.The conventional accounting practice does not allow non measurable items in balance sheet. Slowly corporate world is recognizing the importance and role of human resources which results to human resource accounting. Its an extension to conventional accounting. Its still not mandatory but big corporate houses have started following it. read less
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Image Consultant with over 5 years experienced into Life Skills, Business Consultant, PD

In accounting only those things which can be measured in monetary terms are recorded. We can't put a monetary value to efficiency and hence it cant be recorded.
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