Employees are a company’s most valuable asset. Without employees, companies are unable to carry out their business. There would be no one managing, no one to manage, and there will be no products or services being created and therefore no profit. In class, we discussed why employees are not included on the balance sheet under assets of a company. Since people are not legally owned by the company, they cannot be an asset, unlike a piece of equipment for example. In the article “Are you an asset to your company?” by John W. Schoen, he points out the same reasoning as we did in class: a company does not own its employees even if they are bound by a legal contract.

I think it would be hard to establish a standard way of accounting for an employee under assets.  Assigning a value to different individuals will be challenging. What makes one individual more valuable than the next? Would you depreciate people on the balance sheet as a person ages like you would with other fixed assets? With these questions in mind, I don’t think there will ever be a standard way to measure employees simply because how different people are.