Business Finance: Understanding 'Human Assets' Essay Question
While humans drive a business's success, should they be treated as tangible assets? Delve into Business Finance MOD003319 Essay Question to unravel this and other financial conundrums.
From time to time, there have been attempts to place a value on the ‘human assets’ of a business in order to derive a figure that can be included on the statement of financial position. Do you think humans should be treated as assets? Would ‘human assets’ meet the conventional definition of an asset for inclusion on the statement of financial position?
Explain the following terms:
- Historic cost concept
- Going concern concept
- Double entry concept
- Matching concept
- Rights issue
- Corporate governance
‘Not for profit organisations are not interested in making a profit.’ Is this statement true? Does accounting and finance have a less important role to play in not-for- profit organisations than for businesses?
- Financial Accounting and Management Accounting
- Equity shares and Preference shares
- Profit and Cash
The concept of placing a value on the human assets of a business and including it on the statement of financial position is debatable. Although humans facilitate the success and productivity of a business, treating them as assets raise ethical, conceptual, and practical issues. According to Marsal (2020), humans are not tangible resources such as equipment or property. They possess unique skills, knowledge, and capabilities that contribute to the value and growth of a business. The value that humans bring to a business goes beyond their physical presence. Their unique perspectives, problem-solving abilities, creativity, and interpersonal skills enable them to contribute to the innovation, teamwork, and success of a company (Todericiu et al., 2014). As such, human resources play a critical role in driving productivity, efficiency, and competitiveness in organisations.
In addition, Takahashi (2022) indicates that treating humans as assets… Read More