Accounting for Human Capital: Is the Balance Sheet Missing Something?
Passard C. Dean, DBA, CMA, FLMI; Kaitlin McKenna; Vyas Krishnan

Abstract
Human capital has become a significant factor in the success of organizations and is often regarded as one of the most valuable assets of corporations. However, traditional accounting practices do not classify human capital as an asset on the balance sheet. Society has witnessed a transition from the industrial age to the information age, and accounting has not transitioned along with it. Could the balance sheet be outdated? This paper explores the current view point on whether or not human capital should be accounted for on the balance sheet. The results revealed that 87% of the respondents hold the belief that human capital should not be accounted for and reported on balance sheets.

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