Recognizing Employees as Assets

by Nathan Holgate
(Chicago, Illinois)

Chicago cityscape

Chicago cityscape

Q: You mentioned first that employees could sometimes be considered assets. Because you can't assign a value to them, though, they are not included in assets in accounting? Are there times when they would be quantified and included as assets?

Great question Nathan. The only example I can think of where this could be done, funnily enough, would be in professional sports - and specifically team sports - where each player can be bought and sold for a sum of money. For example soccer teams, baseball, basketball, hockey, rugby teams, etc.

Does anyone know for sure if these "employees" are listed as assets on the balance sheet in accounting for sports teams?

Can anyone provide other examples of employees as assets? Comments are welcome.

Comments for Recognizing Employees as Assets

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something about assets
by: Anonymous

Why are employees not defined as assets?

by: Atif Amin

In my opinion employees can be assets because you pay them against services and salaries are your liabilities. Other side you give overtime also for his extra services. And also give part in percentage from your profit in shape of bonus.

Contract based emplyees
by: Anonymous

Contract based employees.

Even if we assume permanent employees can leave organization at any point, the time frame, for which such employees work is decided and since we know how much they are worth, they should be considered asset.

Valuing Employees
by: Anonymous

Salaries themselves usually reflect the value the company places on the employee in question. So you could work out a value based on this on its own. Or like you said, you could take additional income the employee brought in (if these figures are available) compared to salary and work out some sort of overall value for your employee "asset." Remember though, in conventional accounting employees are NOT counted as assets. This is just theoretical.

Michael Celender

isnt it possible?
by: Anonymous

Wouldn't it be possible to calculate all the salaries that you have spent on the employee and how much money that employee has earned you and somehow get a good estimate of how valuable the employee is as an asset?

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