A Note on the Relationship Between Human Assets and Human Capital.

Abstract This article presents information on a conceptual framework for linking some seemingly diverse approaches to human resource accounting. Human resource accounting has two components, human asset accounting and human capital accounting. Human asset accounting is concerned with determining the value of the human resources employed in an organization to the organization. Human capital accounting is concerned with determining the value of the human resources employed in an organization to the employees of that organization. The total value of the human resources employed in an organization is equal to the value of the organization's human assets and its employee's human capital. Under the proprietary and entity theories of the firm, accountants are primarily interested in determining the value of human assets to an organization. However, they must recognize that changes in human capital values affect human asset values. If the enterprise theory of the firm were adopted, accountants would also be directly interested in determining the total value of the human resources employed in an organization and the value of the employee's interest in these resources.