Should Companies Expand Human Capital Disclosure?

by Mark Oppenheimer

Many people would agree that quantifying the worth of human capital would be advantageous to a company because, putting aside the administrative burden, it would permit them to shift the focus away from tangible assets to the real core of value creation.

Human capital reporting would also provide analysts, institutional investors, and private shareholders with a variable that would permit comparison and differentiation within a particular sector, thereby aiding investment decisions.

But how can the value of human capital actually be assessed, quantified and put into accounting speak? What common yardstick can we find that would reflect real value and be applicable to all companies?

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