file05629 - April 1 2017 Dear Tony Trainer Im a student...

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April 1, 2017 Dear Tony Trainer, I’m a student from UTAS, and I know nowadays more and more people believe that human capital should be recognized as an asset. As far as I’m concerned, both advantages and disadvantages may appear if we add human capital into balance sheet. Adam Smith noted the value of human capital in The Wealth of Nations, “A man educated at the expense of much labour and time to any of those employments which require extraordinary dexterity and skill, may be compared to [an] expensive machin[e]” (Smith 1776/1976). So, there must be some advantages if a company recognizing human capital as an important asset. As we all know, the brain power of employees is the most expensive asset of the company, if the company can record human capital clearly it will show the condition of talent introduction in the company, which will help the company to develop, especially in talent introduction. What’s more, a company with higher number of human capital on the balance sheet may reflect the working ability of the company, which means more talents in the company will do a better job, and this may attract more business cooperation for the company. At the same time, the company with a higher level of human capital may attract more employees with good skills, resources and talent to join, like a good doctor can treat more patients and save more lives in a bigger and better hospital with other famous doctors rather than in an old small clinic.
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