Question

If Infosys Technologies investment in human capital is a core strategic investment, surely it must be on the company’s balance sheet, where is it on the company’s audited balance sheet? If is it not there, why is it not there? Should it be there

Answer 1

Infosys Technologies has not specifically the value of its human resources on the balance sheet as per the latest annual report hosted for investors. Human resource accounting does not form a part of the balance sheet since the financial reports are formed on the basis of conventional accounting practices where these resources are purchased just as any other input for the business to function . GAAP and IFRS do not have a specific standard on human resources. Local regulations also do not mandate accounting for human capital and disclosure of the same in the audit reports. Also there is no reliable measurement criteria of human resources and the concept is at a developing stage. Human resources cannot be solely quantified in numbers and it is difficult to measure the qualitative aspects of an individual. There is certainly a necessity of reporting human resource capital to ensure comparability and completeness of financial statements as well will help users understand how well the company is using the human resources.