Should Human Capital be fully capitalized on the Balance Sheet?

Book value accounts for about 20% of a company’s market value today. The rest – 80% – is down to immaterial ‘assets’. This makes valuing companies very difficult indeed. There are many good reasons why book value always will be lower than market value. However one way to close this gap – and thereby makingContinue reading “Should Human Capital be fully capitalized on the Balance Sheet?”

Human Capital in Financial Statements

Looking through financial statements today it is clear that there is a huge gap between what companies say are their most important asset – people – and what they report in their financial statement – tangible assets, products etc. Financial regulators – such as SEC and FSA – as well as stock exchanges are notContinue reading “Human Capital in Financial Statements”