Since the time of Adam Smith, economists have grappled with the concept of human capital whilst more recently attempts have been made to assess the rate of return made on the investment in education and training. In the last few years considerable interest has been aroused by attempts to include people in the assets of a company, applying to them accounting conventions and assigning some value to the organization's employees. In the United States, William Pyle and his associates at the University of Michigan, backed by a growing Human Resource Accounting Association, have pioneered a particular method. The publication of the joint working party of the ACMA and IPM favoured a different approach. It is the intention of this paper to review the two approaches, highlighting their similarities and differences and to examine the criticisms that have been levelled against both. Finally, a possible solution will be suggested to the identified shortcomings.
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