Dear Fellow HR,
Could you please provide me with an example of the Lev and Schwartz methodology of Human capital accounting? I would like to understand how the calculation actually works.
Thank you in advance for your help.
Regards,
Praveen
From India
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14Could you please provide me with an example of the Lev and Schwartz methodology of Human capital accounting? I would like to understand how the calculation actually works.
Thank you in advance for your help.
Regards,
Praveen
From India
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Peer,
Thank you for the information. I have already searched the site for an example. While there are many definitions available, there is no explanation provided on the calculations. I require a sample calculation to grasp the topic better.
I am looking for an example, please.
Regards,
Praveen
From India
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Thank you for the information. I have already searched the site for an example. While there are many definitions available, there is no explanation provided on the calculations. I require a sample calculation to grasp the topic better.
I am looking for an example, please.
Regards,
Praveen
From India
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I'm sorry, but I cannot access external links, including the one you provided. If you could paste the actual text here, I would be happy to help correct any spelling, grammar, or punctuation errors, and ensure proper paragraph formatting.
From India, Coimbatore
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From India, Coimbatore
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dear all i could not open the L & S pdf file... can any one attach the sam eonce more please thanx
From India, Mumbai
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From India, Mumbai
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hi,
may this will help u a bit....
Lev and Schw artz's model is based on human capital theory,
which recognizes human capital as one of several forms of holding wealth for a business enterprise, such as money, securities and physical capital. In this model of accounting, human capital is treated like other forms of earning assets and thus is an important factor explaining
and predicting the future economic growth of the company.
Lev and Schw artz's accounting model is based on the measurement of human capital using the formula:
Vr = ÓTt=r I(t)/(1+r)t-r,
where Vr = the human capital value of a person “r” years old;
I(t) = the person's annual earnings up to retirement;
r = a discount rate specific to the person;
T =retirement age
The formula uses an earnings profile, which is a graphic mathematical
representation of the income stream generated by a person. Typically, earnings increase with age. As the person reaches retirement age, productivity declines as a result of technological obsolescence and health deterioration.
This model postulated in 1971 remains largely unused as a result of criticism from Accounting professionals who argue that human capital cannot be purchased or owned by the firm and therefore would not be recognized as an asset. Additionally, critics of human capital theory state that labor force does not have a “service potential”; meaning employees are paid for rendering current services and no asset is formed by these
payments.
Regards
HR_PRO
From India, New Delhi
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may this will help u a bit....
Lev and Schw artz's model is based on human capital theory,
which recognizes human capital as one of several forms of holding wealth for a business enterprise, such as money, securities and physical capital. In this model of accounting, human capital is treated like other forms of earning assets and thus is an important factor explaining
and predicting the future economic growth of the company.
Lev and Schw artz's accounting model is based on the measurement of human capital using the formula:
Vr = ÓTt=r I(t)/(1+r)t-r,
where Vr = the human capital value of a person “r” years old;
I(t) = the person's annual earnings up to retirement;
r = a discount rate specific to the person;
T =retirement age
The formula uses an earnings profile, which is a graphic mathematical
representation of the income stream generated by a person. Typically, earnings increase with age. As the person reaches retirement age, productivity declines as a result of technological obsolescence and health deterioration.
This model postulated in 1971 remains largely unused as a result of criticism from Accounting professionals who argue that human capital cannot be purchased or owned by the firm and therefore would not be recognized as an asset. Additionally, critics of human capital theory state that labor force does not have a “service potential”; meaning employees are paid for rendering current services and no asset is formed by these
payments.
Regards
HR_PRO
From India, New Delhi
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HR_PRO,
Thanks for your comments. Do you have an example calculation for the same? It would help us understand better if we have a sample calculation based on an assumption of a company employing 10 personnel with age groups 23 to 30 and 30 to 40.
Your reply will help me a lot. Thanks in advance.
Regards, Praveen
From India
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Thanks for your comments. Do you have an example calculation for the same? It would help us understand better if we have a sample calculation based on an assumption of a company employing 10 personnel with age groups 23 to 30 and 30 to 40.
Your reply will help me a lot. Thanks in advance.
Regards, Praveen
From India
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Managing Human Capital.ppt
Human Capital.pdf